Holding

A grant under the Government Grants Act, 1895 is deemed a lease of agricultural land and is subject to the ceiling provisions of the U.P. Imposition of Ceiling on Land Holdings Act, 1960; the amendment deleting s.6(h) was effective, making the surplus‑land notice valid, and Section 133‑A does not apply.

Summary

The appellant, Raghubar Dayal (deceased), was granted parcels of land in 1956 under the Government Grants Act, 1895 for personal cultivation, subject to lease‑like covenants. In 1974 the prescribed authority, invoking the U.P. Imposition of Ceiling on Land Holdings Act, 1960, issued a notice determining surplus land and ordered its surrender. The appellant challenged the jurisdiction of the authority, arguing that the grant was excluded from the ceiling Act, that the notice was invalid because the exemption clause under s.6(h) had been deleted and no fresh notice under s.9 was issued, and that the grant was not a lease. The Supreme Court held that the grant, though made under the Government Grants Act, is in substance a lease of agricultural land and therefore falls within the definition of “holding” under s.3(d) of the 1960 Act; the proviso to s.3 of the Grants Act expressly makes the ceiling provisions applicable, and the amendment deleting s.6(h) was effective, rendering the notice valid. Section 133‑A of the U.P. Zamindari Abolition Act was held inapplicable. Consequently, the appellate authority’s determination of surplus land was lawful. The appeals were dismissed.

Issues considered

Whether land held under a grant made pursuant to the Government Grants Act, 1895 is excluded from the operation of the U.P. Imposition of Ceiling on Land Holdings Act, 1960
Whether the notice issued under s.10(2) of the 1960 Act was jurisdictionally valid in view of the deletion of the exemption clause s.6(h) and the requirement of a fresh notice under s.9
Whether the grant constitutes a lease within the meaning of s.3(d) of the 1960 Act
Whether Section 133‑A of the U.P. Zamindari Abolition & Land Reforms Act, 1950 applies to the lease

Legislation cited

Government Grants Act, 1895s. 2, s. 3
Transfer of Property Act, 1882s. 105
U.P. Zamindari Abolition & Land Reforms Act, 1950s. 133-A

Subjects

land ceilinggovernment grantleaseU.P. land reformssurplus land determinationexemption clause deletionagricultural land holding

Judgment

r
RAGHUBAR DAYAL (DEAD) A
v.
STATE OF U.P. AND ORS.

MAY 2, 1995

[K. RAMASWAMY AND B.L. HANSARIA, JJ.] B

Govemmellt Grants Act, 1895 :

Section 3-Land-<irand for cultivation-Computation of ceiling
area-Grant held in substance of lease for agriculture-Grantee held holder C
and not outside the purview of U.P. Imposition of Ceiling on Land Holdings
Act, 1960.

U.P. Imposition of Ceiling on Land Holdings Act, 1960 : Section
3(9T-'Holding'-Meaning of-Grantee of Government land for cultivation
held holder. D
Sections 6(h) and !)-Exemption clause-Deletion of-Amendment
coming into force before detennination of ceiling of land-Held no fresh
notice was necessary under Section 9.

U.P. Zamindari Abolition of Land Refonns Act, 1950: Section 133-A E
Applicability of

The appellant was granted certain parcels or land on July 11, 1956
under the Government Grants Act, 1895 for cultivation. Under the terms or
the grant the grantee was to pay annual lease amount and was to personally
cultivate the land within the prescribed period; the land was to be used for F
cultivation only and purposes incidental there!<>"; the grantee was not to
part with his possession. Later by a notice dated 20th October 1974 issued
under Section 10(2) orthe U.P. Imposition or Ceiling on Land Holdings Act
1960 the prescribed authority determined the surplus land calling upon the
appellant to surrender the excess land. /The appellant filed appeals before G
the appellant authority and the Civil Judge which were dismissed. The High
Court also confirmed the orders or the authorities under the Act.

In appeals to this Court it was contended for the appellants that (i)
the computation or surplus land was illegal because the land covered under
the Grants Act was to be excluded from the operation or the 1960 Act; (ii) H
1093
,

1094 SUPREME COURT REP OR TS [1995) 3 S.C.R.

A notice determining surplus land was without jurisdiction as no fresh notice' ,
was issued to the appellant under section 9 of 1960 Act after the deletion of
the exemption clause 6(h) by Amendment Act on January 14, 1975; and (iii) 'f •
the Government Grant is not a lease and therefore section 3(9) of 1960 Act
was inapplicable.

B Dismissing the appeals, this Court

HELD : 1. The preamble to the grant clearly mentioned that the land
was granted for cultivation to make the improved methods of cultivation
within the meaning of section 3(8) of the U.P. Tenancy Act XVII of 1939.
C Thus it could be seen.that though it is a grant made under the Government
Grants Act, it is in substance a lease of agricultural land granted by the
Government to the appellant for cultivation subject to the covenants con-
tained thereunder. During the period of the subsistance of the lease it is
terminable on notice by either side. Accordingly, the appellant is a bolder
of agricultural lands within the meaning of section 3(9) of the 1960 Act.
D (1096-G, 1097-D, FJ
2. Even otherwise the Government Grants Act itself prescribed the
applicability of the Act to the lands covered by the grant. The proviso to
sub-section (3) of section 3 was inserted with retrospective effect. By opera-
E tion of the said proviso the Act clearly applied for the purpose of computa-
tion of the ceiling area of the agricultural lands. Thus it would appear that
the Government Grants Act intended that even the grantee under that Act
shall not be in excess of the ceiling area prescribed under the Act. Thereby,
the lessee of the Government land, though had a grant under the Govern-
ment Grants Act, cannot claim to have been outside the purview of the Act.
F Therefore, the view taken by the authorities below and the High Court is ~ •
perfectly right and legal. (1097-G-H, 1098-B-C]

3. Section 6(h) of the 1960 Act was deleted by way of an Amendment
made in January 1975 but it was made effective from 1973. Notice under
section 10(2) was issued to the appellant by the Prescribed Authority on
G October 20, 1974 and, as such, after the Amendment Act had become
effective. By the date of the determination of the ceiling land, the amend-
ment had come into force. Therefore, the exemption granted under section
6(h) stood deleted. In consequence, the acts done by the authorities in
determining the ceiling area and declaration of surplus land was within
H their power and jurisdiction. [1098-H, 1099-A-B]
RAGHUBAR DAYAL v. STATE 1095

4. Since the lease itself was granted by the Government under the A
Government Grants Act, Section 133-A of the U.P. Zamindari Abolition &
•· )' Land Reforms Act, 1950 has no application. (1099-G)

Ma/khan Singh & Ors. v. The State of U.P. & Ors., (1976) 2 S.C.C. 268;
Byramjee Jeejeephoy (P) Ltd. v. State of Maharashtra, (1964) 2 SCR 737;
State of U.P. v. Zahoor Ahmad, (1974) 1 S.C.R. 344 and Bihari Lal Express B
Newspapers (P) Ltd. v. Union of India, (1986) 1 S.C.C. 132, held inap-
plicable.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3012-14
of 1979.
c
From the Judgment and Order dated 4.7.79 of the Allahabad High
Court in W.P. No. 3763 of 1976.

S.N. Singh for the Appellant.

R.B. Misra for the Respondents. D

The following Order of the Court was delivered :

Substitution allowed.

These three appeals are disposed of by a common judgment since E
they arise from the common judgment delivered by the High Court of
Allahabad in W.P. No. 3763/79 and batch dated July 4, 1979. The facts in
C.A. No. 3012/79 are suffi£ient for disposal of the appeals. On July 11,
1956, the Government had granted to the appellant certain parcels of land
for settling down colonies there on and to cultivate the land on improved F
methods of cultivation, subject to the terms and conditions contained in
the grant made under the Government Grants Act, 1895. Under s.10(2) of
the U.P. Imposition of Ceiling on Land Holdings Act, 1960 (for short 'the
Act') , notice was issued on October 20, 1974 by the prescribed authority
calling upon him to submit the return for detern1ination of the ceiling area.
The appellant's objections raised on December 4, 1975 were rejected by G
the Prescribed Authority by proceedings dated February 28, 1975 holding
that the appellant held 94 Bighas 16 Biswas of surplus land and was called
upon to surrender the same. The appellant carried the matter in appeal to
the appellant authority and the Civil Judge by judgment dated June 2, 1976
dismissed the appeal. In the writ petitions, as stated earlier, the High Court H
1096 SUPREME COURT REPORTS [1995]3 S.C.R,

A confirmed the orders of the authorities under the Act.
Shri Raj Kumar Gupta, learned counsel for the appellant, contended
that when the grant was made under the Government Grants Act, by
operation of s.2 and s.3 thereof, the lands covered under the Grant Act
stood excluded from the operation of the Act. The competent Authority
B under the. Act has, therefore, no jurisdiction or power to issue the notice
and also determining the surplus land calling upon the appellant to sur-
render the excess land. Alternatively, it is contended that the appellant is
required to file the return under s.9. Section 6(h) was deleted by Amend-
ment Act on January 14, 1975. Therefore, the notice issued in October 1974
C is without jurisdiction and a nullity. No fresh notice was issued to the
appellant under s.9 after the deletion of the exemption clause referred to
therein. The computation of the surplus land is, therefore, illegal. In
support thereof, he placed reliance on the judgment of this Court m
Mafkhan Singh & Ors. v. The State of U.P. & Ors., 1976 {2) SCC 268.

D
The first question is whether the lands held by he appellant are
excluded from the purview of the Act. Section 3( d) of the Act defines
holding meaning the land or lands held by a person as a bhuimdhar, Sirdar,
Asami Gaon Samaj or an asami mentioned in s.11 of the Uttar Pradesh
Zamindari Abolition & Land Reforms Act, 1950 or as a tenant under the
E U.P. Tenancy Act, 1939, other than a sub-tenant, or as a Government lessee,
or as a sub-lessee of a Government lessee, where the period of the
sub-lease is co-extensive with the period of the lease. A reading of its
clearly indicates that the land held as a tenant under the U .P. Tenancy Act,
other than the lands as a sub-tenant, or as a Government lessee or as a
F sub-lessee of a Government lessee where the period of the sub-lease is
co-extensive with the period of the lease is covered by the Act. The
..
contention of the appellant is that the Gover<ment grant is not a lease and
that, therefore, s.3{d) is inapplicable.

We find no force in the contention. The preamble to the grant clearly
G mentioned that the land was granted for cultivation to make the improved
methods of cultivation within the meaning of s.3(8) of the U.P. Tenancy
Act XVII of 1939. The grant was subject to the terms and conditions
mentioned therein. The conditions, inter alia, were that the appellant has
to pay annual lease amount and has to personally cultivate the land as
H enumerated in Clause (l){a). The grantee shall commence the cultivation
r
RAGHUBAR DAYALv. STATE 1097

within the prescribed period mentioned in Clause (b) and he shall per- A
manently reside in the colonies as mentioned in Clause (c). Clause (2)
mentions that the grantee shall use the land for the purpose of cultivation
only and purposes incidental thereto and for no other purposes. The
grantee shall not part with the possession of the land. In other words, he
is prohibited to sub-lease the land. Clause (4) mentions its impartibility. B
Clause (5) prohibits subletting, transfer or otherwise alienate the land.
Clause (5) says that the lessee shall pay the rent and if he fails, the
defaulted amount would be !teated as arrears of land revenue and
recoverable from him. Clause (6) mentions that he shall be at liberty at any
time to surrender the land to the Government. Clause (7) gives power to
the Government to determine the lease in which case the lessee shall not C
be entitled to any compensation for any improvements as he might have
made for the benefit of the land, for any building, or structures erected by
him thereon.

Thus it could be seen that though it is a grant made under the
Government Grants Act, it is in substance a lease of agricultural iand D
granted by the Government to the appellant for cultivation subject to the
covenants contained thereunder, some of which have been mentioned
hereinbefore. Section 105 of the Transfer of Property Act defines lease as
transfer of right to enjoy immovable property made for a certain time,
express or implied or in perpetuity, in consideration of a price paid or E
promised or of money etc. to the transferor by the transferee who accepts
the transfer on such terms. The grant is in substance, therefore, is a lease
of the agricultural land for personal cultivation on improved methods of
cultivation during the period of the substance of the lease for considera-
tion, terminable on notice _by either side. Accordingly, the appellant is a
holder of agricultural lands within the meaning of s.3(d) of the Act. F

Even otherwise, we find that the Government Grants Act itself
prescribed the applicability of the Act to the lands covered by the grant.
The proviso to sub-section (3) of s.3 reads thus :

"Provided that nothing in this section shall prevent, or deemed
G
ever to have prevented the effect of any enactment relating to the
acquisition of property, land reforms or the imposition of ceiling
on agricultural lands i.e. U.P. Act 13 of 1960."

That was inserted with retrospective effect. Thus, it could be seen H
1098 SUPREME COURT REPORTS (1995] 3 S.C.R.

A even if the present is construed as a grant of the agriculcural lands under
the Government Grants Act, by operation of the proviso to sub-s. (3) of
s.3 of the Act, the Act is clearly applied for the purpose of computation
of the ceiling area of the agricultural lands. It would appear that the
Government Grants Act intended that even the grantee under that Act
B shall not be in excess of the ceiling area prescribed under the Act. Thereby,
the lessee of the Government land, though had a grant under the Govern-
ment Grants Act, cannot claim to have been outside the purview of the
Act.

So, we hold that the view taken by the authorities below and the high
C Court perfectly right and legal. The decisions cited by the learned counsel
are inapplicable to the facts in this case. In Byramjee Jeejeebhoy (P) Ltd.
v. State of Maharashtra, [1964] 2 SCR 737 this Court held at page 747 that
the grant could not be regarded as a lease as it contemplated a demise or
transfer of a right to enjoy the land for a term or in perpetuity in considera-
tion of a price paid or promised or services or other things of value to be
D rendered periodically or on specified occasions to the transferor. In that
case, since the grant was without any of the covenants, it was held that it
was not a any but a grant. But, as seen, the grant herein itself specifically
enumerates the covenants noted above and a reading thereof clearly indi-
cates that it was in substance a lease, though the grant was made under the
E Government Grants Act.

The ratio in State of U.P. v. Zahoor Ahmad, [1974] 1 SCR 344 also
has no application to the facts in this case. Therein, the provisions of the
Transfer of Property Act was sought to be applied to the grant. By
F operation of s.3 of the Government grants Act, the applicability of the
provisions of the Transfer of Property Act stands excluded and, therefore,
it was held that Act has no application to grant made under the Govern-
ment Grants Act. Equally, the case of Bihari Lal Express Newspapers (P)
Ltd. v. Union of India, ['1986] 1 SCC 132 has no application as its ratio was
to the same effect.
G
With regard to the need to issue fresh notice as required under s.9,
we are of the considered view that there is no force in the contention. It
is true that s.6(h) was deleted by way of an Amendment Act made in
January, 1975, but it was made effective from 1973. Notice under s.10(2)
H was issued to the appellant by the Prescribed Authority on October 20,
RAGHUBARDAYALv. STATE 1099

1974 and, as such, after the Amendment Act had become effective. Fur- A
ther, on the facts in this case, the compliance is one of substance rather
than from. The appellant voluntarily failed to file the return, so he was
called upon to file the return under s.10(2) of the Act. Whether the return
is voluntarily filed or not, makes little difference, when the authority has
jurisdiction and determined the ceiling area. It is seen that by the date of B
the determination of the ceiling land, the amendment had come into force.
Therefore, the exemption granted under s.6(h) stood deleted. In conse-
quence, the acts done by the authorities in determining the ceiling area and
declaration of surplus land was within their power and jurisdiction.

The ratio in Ma/khan Singh's, [1976] 2 SCC 268, has no application C
to the facts in this case. In that case the facts were that the tenure holder
having had excess land failed to submit the statement in respect of his
holding under the U .P. Imposition of Ceiling on Land Holdings Act, 1960
within the time prescribed. Consequently, the Prescribed Authority issued
the notice determining the surplus land. In response, the tenure holder D
filed the objections. One of the pleas was that there 14 members in his
' family including his sons, grandsons and granddaughters and all of them
/- were joint in home, hearth and estate, and that consequently, there was no
surplus area with him. Therefore, second notice was necessary to enable
to file a separate return claiming appropriate computation of holding. So
the ratio is inapplicable to the facts in this ease. - E

It is next contended that under S.133-A of the U.P. Zarnindari
Abolition & Land Reforms Act, 1950, the lease covered under the Act was
..> ,;. treated to be Government lease and the appellants were entitled to hold
the same in accordance with the terms and conditions of the lease relating F
thereto. It is contended that this Act was extended to Nainital after 1.7.1969
·and, therefore, the notice issued is_ also illegal. We find no force in the
contention. In this case, since the lease itself was granted by the Govern-
ment under the Government Grants Act, s.133-A has no application.

The appeals are accordingly dismissed. But in the circumstances G
' --1 without costs.

T.N.A. Appeals are dismissed.

H