GWALIOR SUGAR CO. LTD. & ANR.versusANIL GUPTA AND ORS.

                        [2012) 9 S.C.R. 974


A              GWALIOR SUGAR CO. LTD. & ANR.
                               v.
                    ANIL GUPTA AND ORS.
                (Civil Appeal No. 7760 of 2012)

                       NOVEMBER 2, 2012
B
          [P. SATHASIVAM AND RANJAN GOGOi, JJ.]

        MADHYA PRADESH LAND REVENUE CODE, 1959:

c      s. 165(1) - Transfer of land by 'Bhumiswami' - Company
  owning a sugar factory was granted pattas of subject land in
  the year 1941-42 - Transfer of a part of the subject land
  challenged in a writ petition under public interest litigation -
  Held: The company having acquired the status of a "pucca
0 tenant': with the coming into force of the Land Revenue Code,
  became 'Bhumiswami' of the land - Rights of a bhumiswami
  enumerated uls 165 encompass right to transfer - Right to
  transfer being a statutory right and the bar imposed on the
  right to transfer not being applicable to non-agricultural land,
E a clause in a patta granted in the year 1940-41 cannot restrict
  such a right - Nor is there any material to indicate that under
  terms of the lease granted u/s101 of Tenancy Act and s.39
  of Abolition of Zamindari Act any restriction or bar had been
  imposed on the appellant-Company from making such a
  transfer - Provisions of Urban Ceiling Act and Ceiling on
F Agricultural Holding Act, ex-facie, do not apply to the case of
  appellant-company - Urban Ceiling Act, 1976 - Madhya
  Pradesh Ceiling on Agricultural Holding Act, 1960 - Madhya
  Pradesh Zamindar Abolition Act, 1951 - Madhya Bharat Land
  Revenue and Tenancy Act (Samvat, 2007) - s.54(vii) - Public
G Interest Litigation.
        The appellant-company was, in the year 1941,
    granted 215 bighas of land, under 6 pattas issued by the
    Zamindar for setting up the sugar factory with a
H                               974
 GWALIOR SUGAR CO. LTD. & .c\NR. v. ANIL GUPTA 975
                AND ORS.
prohibition of any kind of agricultural operations thereon.     A
After setting up the sugar factory, the company, due to
financial reasons sold about 9 bighas of surplus land. A
writ petition was filed as a public interest litigation
contending that the surplus land w1ls transferred contrary
to terms of the patta in connivance and collusion with          B
officials of State Government. The stand of the appellant-
company was that the original pattas of the subject land
were granted to it by the Zamindar in the year 1941-42;
that in the year 1950, the status of the appellant in respect
of the said land was recorded as 'Gair Maurusi;" and that       c
with the coming into force of the Tenancy Act by virtue
of s.54 (viii) of the Tenancy Act the appellant became a
"pucca tenant" and on coming into force of the M.P. Land
Revenue Code, the appellant became 'bhumiswami' with
a right of transfer u/s165(1) of the Code. The initial stand    0
of the officials of the State was also that the appellant
being "pucca tenant" had acquired the status of
'bhumiswami' and the appellant was exempted from the
operation of the provisions of Ceiling on Agricultural
Holding Act by an order dated 8.1.1976. However, in the
additional return dated 7.8.2007 filed on behalf of the State   E
the right of the appellant to transfer the land contrary to
terms of pattas was questioned. The High Court directed
for demarcation of surplus land of the appellant-company
under the provisions of both the Urban Land Ceiling Act,
1976 as well as the Madhya Pradesh Ceiling on                   F
Agricultural Holding Act, 1960 and held that the excess
land so demarcated would vest in the Government. The
company was further restrained from effecting any
transfer of urban land allotted to it and any transfer made
were declared null and void. Aggrieved, the company filed       G
the appeal.
    Allowing the appeal, the Court
   HELD: 1.1 The rights of a 'bhumiswami' are clearly
enumerated by s.165 of the MP Land Revenue Code                 H
    976     SUPREME COURT REPORTS             [2012] 9 S.C.R.


A which encompasses a right to transfer. The bar imposed
  on the right to transfer does not apply to non-agricultural
  lands and, therefore, would not be relevant to the instant
  case. If the right of transfer has been conferred on the
  appellant by the provisions of a statute and the bar
B contemplated does not apply to the appellant, then a
  clause or a condition in the original patta granted by the
  Zamindar in the year 1940-41 cannot restrict such a right.
  In any case, there is no specific clause or condition in any
  of the original pattas prohibiting or even restricting the
C right of the appellant to transfer any part of the land
  allotted to it that may be lying vacant. Neither any material
  has been placed before this Court to enable it to take the
  view that under terms of the lease granted u/s101 of
  Tenancy Act and s.39 of Abolition of Zamindari Act any
  restriction or bar had been imposed on the appellant-
0
  Company from making such a transfer. [para 13] [985-C-
    G]
       1.2 The provisions of the Zamindari Abolition Act,
  1951, have been pressed into service for the first time in
E the instant appeal. Neither in the pleadings nor in the
  arguments made before the High Court on behalf of the
  State, the facts asserted and the legal issues raised
  before this Court had been urged. In the absence of any
  pleading that the procedure for grant of a fresh lease
F contemplated u/s 39 of the Zamindari Abolition Act had
  not been followed by the appellant by making the
  requisite application as contemplated by s.101 of the
  Tenancy Act, no adverse consequence can be attributed
  to the appellant. Rather, the status of the appellant as a
G 'bhumiswami' recorded in the revenue records of the
  later years, in the absence of any contrary material, will
  have to be understood to be pursuant to the grant of a
  fresh lease u/s 39 of the Zamindari Abolition Act read with
  the provisions of s.101 of the Tenancy Act. Intact,
H acceptance of the acquisition of the status of
GWALIOR SUGAR CO. LTD. & ANR. v. ANIL GUPTA 977
               AND ORS.

'bhumiswami' by the appellant will render it unnecessary A
to go into the basis of the acquisition of the said status,
which, in any case, appears to be contrary to the
provision of s. 1(2) of the Tenancy Act. The said provision
clearly excludes the villages settled under the Zamindari
system from the purview of the operation of Part II of the B
Tenancy Act, which part of the Act, inter alia, also deals
with the acquisition of the status of "pucca tenant" and
'Bhumiswami' by a tenant. However obliteration of Part II
of the Tenancy Act by operation of s.1 (2) thereof does not
extinguish the different denominations of tenancy c
including the status of Bhumiswami which can very well
be acquired by grant of such status by a fresh lease u/s
101 of the Tenancy Act read with s. 39 of the M.B.
Zamindari Abolition Act. (para 12) (984-D-H; 985-A-C]

    1.3 The provisions of either of the two Acts, namely, D
the Urban Land Ceiling Act ad the Ceiling on Agricultural
Holding Act, ex-facie, do not apply to the case of the
appellant-Company. [para 14] [985-H; 986-A]

    1.4 The judgment of the High Court as well as the E
directions contained therein are set aside. [para 15] (986-
C]

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7760 of 2012.
                                                               F
     From the Judgment & Order dated 01.12.2007 of the High
Court of Madhya Pradesh at Gwalior in Writ Petition No. 1773
of 2006 (PIL).

    Ranjit Kumar, Dhruv Mehta, Abhay A. Jena, Sarthak G
Mehrotra, Bina Gupta, B.S. Banthia, Pranab Kumar Mullick,
Ashish Rana for the Appearing Parties.

    The Judgment of the Court was delivered by

    RANJAN GOGOi, J. 1. Leave granted.                         H
    978      SUPREME COURT REPORTS                    [2012] 9 S.C.R.


A         2. This appeal is directed against the judgment and order
    dated 01.12 .2007 passed by the High Court of Madhya
    Pradesh in a Public Interest Litigation registered and numbered
    as Writ Petition No.1773/2006. By the order impugned in the
    present appeal, directions have been issued by the High Court
B   for demarcation of the surplus land of the appellant - Company
    both under the provisions of the Urban Land Ceiling Act, 1976
    (since repealed) (hereinafter referred to as 'the Urban Land
    Ceiling Act') as well as the provisions of the Madhya Pradesh
    Ceiling on Agriculture Holding Act, 1960 (hereinafter referred
C   to as "the Ceiling on Agricultural Holding Act). After the
    demarcation of the excess land in terms of the directions issued
    by the High Court, further directions have been issued for
    vesting of the excess land, both urban and agricultural, in the
    Government. Furthermore, the appellant - Company has been
    restrained from affecting any transfers of the urban land allotted
0
    to it and all such transfers as may have been made have been
    declared as null and void by the High Court.

        3. A brief resume of the relevant facts in which the above
    noted directions have been issued by the High Court may now
E   be set out:

          The appellant, a private limited company, is the owner of
    a sugar mill located at Dabra, district Gwalior in the State of
    Madhya Pradesh. A total of 215 bighas (approximately) of land
F   was allotted to the appellant - Company in Samvat 1998
    (corresponding to English Calender year 1941) on the basis
    of 6 pattas issued by Zamindar in whom the land had come to
    be vested. The pattas specified that the land was meant for
    setting up of the sugar factory and any kind of agricultural
G   operations therein was prohibited. The pattas also specified
    that the same would be valid till the existence of the factory. After
    setting up of the sugar mill the Company appears to have run
    into certain financial difficulties and for the upkeep of the sugar
    mill and for modernization thereof the Company by a Resolution
    decided to sell/transfer some parts of the vacant land allotted
H
 GWALIOR SUGAR CO. LTD. & ANR. v. ANIL GUPTA 979
        AND ORS. [RANJAN GOGOi, J.]

to it. In fact some surplus land stood transferred by way of sale       A
to certain individuals and the area so transferred is roughly
about 9 bighas. In these circumstances, the Writ Petition in
question was filed as a Public Interest Litigation contending that
~urplus land has been transferred contrary to the terms of the
patta in connivance and collusion with the officials of the State       B
Government. According to the petitioner more such transfers
were contemplated.

     4. The stand of the officials - respondents, initially, was that
land measuring about 178 bighas stood recorded in the name              C
of the appellant - Company in the revenue record of Samvat
2013. In the said records the name of the appellant was
recorded as a "pucca tenant" under Section 54 (vii) of the
Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007
(hereinafter referred to as 'the Tenancy Act'). Thereafter with the
coming into force of the MP Land Revenue Code in the year               D
1959 the name of the appellant - Company was recorded as a
'bhumiswami' in respect of the aforesaid land. The revenue
records in support of the above facts were in fact enclosed to
the return filed before the High Court on behalf of the State. A
report dated 2.5.2003 of the primary revenue authority i.e. Naib        E
Tehsildar reciting the above facts and the fact that the appellant
Company was exempted from the operation of the provisions
of the Ceiling on Agricultural Holding Act by an order dated
8.1.1976 passed by the competent authority was also enclosed
to the said return. Subsequently, however, an additional return         F
dated 7.8.2007 was filed on behalf of the state wherein the right
of the appellant to transfer the land contrary to the terms of the
pattas issued to it was questioned, notwithstanding, its status
as a Bhumiswami under the Land Revenue Code, 1959.
                                                                        G
     5. The appellant - Company and its principal Director who
were impleaded respondent Nos.12 and 13 in the PIL, in their
return, placed before the High Court copies of the original
pattas granted by the then Zamindar in Samvat 1997-98
(English Calender year 1941-42). It was claimed that on the             H
    980      SUPREME COURT REPORTS                [2012] 9 S.C.R.


A   basis of the entries in the revenue records, namely, Khasra of
    village Dabra, Samvat 2007 (equivalent to English calendar
    year 1950) the status of the appellant - Company in respect of
    the land in question was recorded as 'Gair Mairusi'. The
    appellant - Company had contended that with the coming into
B   force of the Tenancy Act, w.e.f. 15.8.50, by virtue of the
    provisions of Section 54 (vii), the status of the appellant -
    Company became that of a "pucca tenant". Thereafter, on the
    coming into force of the Land Revenue Code in the year 1959,
    the status of the appellant - Company was that of a bhumiswami
c   which vested in the appellant - Company a right of transfer of
    the land under Section 165 (1) of the Code. The bar imposed
    on such transfer by sub-section (4) of section 165 did not apply
    to the case of the appellant - Company in view of the fact that
    the land that it was holding was non-agricultural land. The
    appellant - Company, in its return before the High Court, had
0
    also referred to an order dated 22.11.1993 of the Under
    Secretary to the Government of India, Ministry of Law Justice
    and Company Affairs (Department of Company Affairs) which
    had noticed all the above facts including the reasons for the
    transfers of some of the lands held by the appellant - Company
E   already made or proposed. It was contended that by virtue of
    the aforesaid order dated 22.11.93 approval of the Central
    Government for commencement of business of sale of surplus
    land by the company was granted. Another significant fact that
    was mentioned by the appellant - Company in its return is a
F    proceeding before the High Court of Madhya Pradesh in
    Second Appeal No.482 of 2002 which stood concluded by order
    dated 25.8.03 holding that the appellant - Company had
    acquired the status of Bhumiswami in respect of the land
    allotted to it.
G
       6. On a consideration of the respective cases pleaded by
  the contesting parties and on due consideration of the materials
  on record the High Court had thought it fit to pass the impugned
  directions, details of which have already been noticed.
H Aggrieved, this appeal has been filed.
 GWALIOR SUGAR CO. LTD. & ANR. v. ANIL GUPTA 981
        AND ORS. [RANJAN GOGOi, J.]

     7. We have heard Shri Ranjit Kumar, learned senior                A
counsel for the appellant and Shri B.S. Banthia, learned counsel
for the respondent Nos. 3-12. None has appeared on behalf
of the PIL petitioners who have been impleaded as the
respondents 1 and 2 in the present appeal.
                                                                       B
        8. Learned counsel for the appellant has contended that
  in the revenue records pertaining to the land in question, as
 existing prior to commencement of Tenancy Act, the appellant
 - Company was recorded as a 'Gair Mairusi'. After coming into
 force of the Tenancy Act w.e.f. 15.8.1950 the appellant -             C
 Company acquired the status of a "pucca tenant" under
 Section 54(vii) of the Act. The said status entitled the appellant
 - Company to the status of "bhumiswami" once the MP Land
 Revenue Code, 1959 came into force. The aforesaid position,
 it is pointed out, had been accepted and acknowledged by the
 State Government in the return filed by it before the High Court.     D
 Learned counsel has also pointed out that the status of the
 appellant - Company as a bhumiswami had not been disputed
 in the additional return filed on behalf of the State - wherein the
only contention urged is that such status would not confer in the
appellant a right to transfer the land contrary to the terms of the    E
patta. Learned counsel has also referred to the order of the
Government of India, Ministry of Law Justice and Company
Affairs dated 22.11.1993 as well as the judgment and order of
the High Court of Madhya Pradesh dated 25.08.2003 in
Second Appeal No. 480 of 2002 to contend that the transfers            F
already made or proposed by the appellant - company were
with due permission of the competent authority of the
Government of India and the right of the appellant - company
to affect such transfers, as a bhumiswami, had attained finality
in law by virtue of the judgment passed in the proceedings of          G
the Second Appeal before the High Court. Learned counsel had
vehemently argued that the right of a bhumiswami to transfer
the land being a statutory right, the exercise thereof cannot be
curtailed by the conditions of the patta, as urged in the
additional return dated 7.8.2007 of the State.                         H
    982      SUPREME COURT REPORTS                 [2012] 9 S.C.R.


A      9. Proceeding further, learned counsel has pointed out that
  the Urban Land Ceiling Act stood repealed w.e.f. 22.3.1999
  and thus was not in force on the date of the judgment of the
  High Court. The provisions of the said repealed Act, therefore,
  could not have been applied to the case of the appellant. In so
B far as the Ceiling on Agricultural Holding Act is concerned, it
  is pointed out that in the report of the Tehsildar dated
  02.05.2003 it has already been recorded that the appellant -
  Company was exempted from the provisions of the said Act.
  In such a situation the High Court could not have invoked the
c provisions of either of the enactments to the present case so
  as to justify the directions under challenge.

         10. The State which had initially supported the case of the
    appellant before the High Court had reiterated before us the
    stand taken by it in the additional counter filed before the High
D   Court on 7.8.2007. Shortly put, it is urged that the land held by
    the appellant was allotted for the purpose of industry and not
    agriculture. It is pointed out that after coming into force of the
    Madhya Pradesh Zamindari Abolition Act, Samvat 2003, w.e.f.
    2.10.1951, the land stood reverted to the Government. Under
E   Section 39 of the Zamindari Abolition Act it was incumbent on
    the appellant to submit an application for grant of a fresh lease
    to be issued by the State Government under Section 101 of
    the Tenancy Act of 1950. It is contended that no such application
    was filed nor any fresh lease was granted by the State
F   Government under the aforesaid provisions of the two Acts in
    question. The acquisition of the status of bhumiswami, in the
    absence of a fresh lease under Section 101 of the Tenancy Act,
    has been questioned on the aforesaid basis. It is also
    contended that the order of the Government of India, Ministry
G   of Law Justice and Company Affairs dated 22.11.93 was not
    a permission authorizing to the appellant - Company to sell the
    land. In so far as the Civil Court decree is concerned, it is
    contended that the said decree pertains only to land covered
    by three specific khasra Nos. i.e. 1760/1, 1755/1 and 1776/1
H   and not to the entire area allotted. In any case according to the
    GWALIOR SUGAR CO. LTD. & ANR. v/ANIL GUPTA 983
           AND ORS. [RANJAN GOGOi, J.]

State, the said decree would not be binding on it in as much                A
as it was not a party to the suit and the resultant proceedings.

     11. The provisions of section 101 of the Tenancy Act and
section 39 of the M.B. Zamindari Abolition Act may be
extracted herein below for the purpose of necessary clarity in              8
the discussions that will have to follow:

      Section 101 of the Tenancy Act

      "101. Leases for non-agricultural purposes - (1) The
      Government may grant leases of land to be used for other              C
      than agricultural purposes. The rights and liabilities of the
      lessee of such land shall be such as may be defined by
      the terms of his lease.

      Special leases for agricultural purposes - (1) In order to
                                                                            0
      develop and demonstrate farming -by mechanical means
      or in view of the special circumstances of *[any tract or
      piece of land] the Government may also grant leases of
      land for agricultural purposes on special and specified
      conditions. The rights and liabilities of the lessee of such
      land shall be such as may be defined by the terms of the              E
      lease.

      (2) The Government may either generally or specially
      delegate any of its powers under this section to such officer
      as may be specified in this behalf."                                  F

      Section 39 of the M.B. Zamindari Abolition Act

      "39. Grant of fresh lease for land given for purposes other
      than agriculture
                                                                            G
      A person who has taken land on lease from the proprietor
      for any purpose other than agriculture shall apply within six
      months from the date of vesting, to obtain from the

•    The word "or place of land" are inserted by M.B. Act No. 18 of 1952.   H
    984       SUPREME COURT REPORTS                  (2012] 9 S.C.R.


A         Government a new lease under Section 101 (1) of Madhya
          Bharat Revenue Administration and Ryotwari Land
          Revenue and Tenancy Act, Samvat 2007, and the
          Government may grant a lease subject to such terms and
          conditions for securing the rent and utility of land as may
B         be deemed proper. From the date of vesting up to the
          grant of new lease the person shall be deemed to be a
          lessee of the Government for that land on the same
          conditions on which the lease was granted to him by the
          proprietor. If the Government does not think it proper in the
c         public interest to grant the lease, the amount of
          compensation shall be paid at market value."

         12. At the very outset, it must be made clear that the
    provisions of the Zamindari Abolition Act, 1951, have been
    pressed into service for the first time in the present appeal.
D   Neither in the pleadings nor in the arguments made before the
    High Court on behalf of the State, the facts now asserted and
    the legal issues now raised had been urged. However, the
    question raised being with regard to the effect of a statutory
    enactment we have considered the same. In the absence of any
E   pleading that the procedure for grant of a fresh lease
    contemplated under section 39 of the Zamindari Abolition Act
    had not been followed by the appellant by making the requisite
    application as contemplated by section 101 of the Tenancy Act,
    no adverse consequence can be attributed to the appellant as
F   contended on behalf of the State. Rather, the status of the
    appellant as a bhumiswami recorded in the revenue records
    of the later years, in the absence of any contrary material, will
    have to be understood to be pursuant to the grant of a fresh
    lease under section 39 of the Zamindari Abolition Act read with
G   the provisions of section 101 of the Tenancy Act. Infact,
    acceptance of the acquisition of the status of bhumiswami by
    the appellant in the aforesaid manner will render it unnecessary
    for us to go into the basis of the acquisition of the said status
    as argued by the learned counsel for the appellant, which, in
H   any case, appears to be contrary to the provision of section 1(2)
 GWALIOR SUGAR CO. LTD. & ANR. v. ANIL GUPTA 985
        AND ORS. [RANJAN GOGOi, J.]

of the Tenancy Act. The said provision clearly excludes the           A
villages settled under the Zamindari system from the purview
of the operation of Part II of the Tenancy Act, which part of the
Act, inter alia, also deals with the acquisition of the status of
"pucca tenant" and "Bhumiswami" by a tenant. However
obliteration of Part II of the Tenancy Act by operation of section    B
1(2) thereof does not extinguish the different denominations of
tenancy including the status of Bhumiswami which can very well
be acquired by grant of such status by a fresh lease under
sections 101 of the Tenancy Act read with section 39 of the
M.B. Zamindari Abolition Act.                                         c
      13. The rights of a bhumiswami are clearly enumerated by
Section 165 of the MP Land Revenue Code which
encompasses a right to transfer. The bar imposed on the right
to transfer does not apply to non-agricultural lands and, hence,
would not be relevant to the present case. If the right of transfer   D
has been conferred on the appellant by the provisions of a
statute and the bar contemplated does not apply to the
appellant, we do not see how a clause or a condition in the
original patta granted by the Zamindar in samvat 1978-79
(corresponding to English Calender year 1940-41) can restrict         E
such a right. In any case, there is no specific clause or condition
in any of the original pattas prohibiting or even restricting the
right of the appellant to transfer any part of the land allotted to
it that may be lying vacant. Neither any material has been
placed before us to enable us to take the view that under terms       F
of the lease granted under Section 101 of Tenancy Act and
Section 39 of Abolition of Zamindari Act any restriction or bar
had been imposed on the appellant - Company from making
such a transfer.
                                                                      G
     14. In view of the aforesaid conclusions the issue with
regard to applicability of the Urban Land Ceiling Act and the
Ceiling on Agricultural Holding Act, need not detains us, save
and except to hold that the provisions of either of the aforesaid
Acts, ex-facie do not apply to the case of the appellant -
                                                                      H
    986     SUPREME COURT REPORTS               [2012] 9 S.C.R.


A Company. We would further like to observe on the view taken
  by us it is not necessary to go into the question as to whether
  the decree affirmed by the High Court of Madhya Pradesh in
  S.A. No.482 of 2002 binds the State or whether the same is in
  respect of the entire land holding of the appellant - Company
B or only a part thereof.

         15. In view of the foregoing discussions and conclusions
    reached we allow this appeal and set aside the judgment and
    order dated 01.12.2007 of the High Court as well as the
    directions contained in the said order.
c
    R.P.                                        Appeal allowed.