1955 Supreme(SC) 17

SUPREME COURT OF INDIA
28th February, 1935.
BOSE, JAGANNADHA DAS, VENKATARAMA AYYAR AND SINHA JJ.
Collector of Bombay, Appellant
Versus
Nusserwanji Rattanji Mistri and others, Respondents.
Civil Appeal No. 74 of 1952.\
Advocates appeared
Mr. C. K. Daphtary, Solicitor-General for India, (Mr. Porus A. Mehta, Advocate, with him) instructed by Mr. R. H. Dhebar, Agent, for Appellant; Mr. M. C. Setalvad, Attorney-General, for India, Mr. Jamshedji Kanga, Senior Advocate (Mr. R. J. Kolah and Mr. Rajinder Narain, Advocates, with them), for Respondents.

Headnote:LAND ACQUISITION ACT, 1894

       Land Acquisition Act (1857), Section 11 - Government possessing interest in land-Interest if subject of acquisition - Right to levy assessment, if interest.

       Land Acquisition Act (1894), Sections 3 (b), 11 and 16- "Encumbrance" -Meaning of. - Bombay City Land Revenue Act, 1876-Section 8-Rights of Government to assess Foras lands-Bombay Foras Act, 1851, Section 2-Foras Lands acquired by Government under Land Acquisition Act, 1857 between 1864 and 1867 and subsequently sold under a deed when no longer required for the purpose for which acquired-Liability to levy of future assessment and rates by Government.

       Crown Grants Act, 1857, Section 3-Scope of-Absolute sale of lands b~ Government- Purchasers right to hold lands rent free-Rule that Crown grant should be construed in favour of Crown- Meaning of.

       Certain lands situated within the City of Bombay were held on a tenure known as "Faras". Between 1864 and 1867 the Government acquired these lands for the purpose of the B.B.C.r. Railway under the provisions of the Land Acquisition Act, 1857. On 22-11-1938 these lands, being no longer required for the purpose of the Railway, were sold by Governor-General to some persons as joint tenants under a deed. On 28-3•1939 the survivor of the purchasers conveyed the lands in trust and appointed trustees. In 1942, the appeHant, Collector of Bombay, acting under the provisions of the Bombay City Land Revenue Act, No. II of 1876, issued notices to the trustees, respondents in the case, proposing to levy assessment on the lands at the rates mentioned therein, and ca!ling for their representation. The respondents denied the right of the appe]]ant to assess the lands to revenue, and instituted two suits before the Revenue Judge for establishing their rights. The allegations were: (1) Under the provisions of the Foras Act (Bombay Act VI of 1851) the maximum assessment leviable on the lands was 9 reas per burga, and that the Government had no right to enhance it; (2) that the effect of the land acquisition proceedings between 1864 and 1867 was to extinguish the right of the State to levy even this assessment, and (3) that having purchased the properties absolutely from the Governor-General, they were entitled to hold them without any liability to pay revenue thereon. They accordingly prayed for a declaration that the Government had• no right to levy any assessment on these lands, or in the alternative, that such assessment should not exceed what was payable under the Foras Act, 1951.

       The Revenue Judge held that as a result of the land acquisition proceedings between 1864 and 1867, the land vested in the Government freed from any liability to pay assessment, and that when the GovernorGeneral transferred them without reserving the right to assess them the purchasers had the right to hold them without any liability to pay revenue. He accordingly granted a declaration that the appellant had no right to levy assessment. The appeal to the High Court was dismissed .

       . There was then appeal by special leave to the Supreme Court.

       Held (allowing the appeal) : (1) In view of the fact that the respondents have at all stages claimed immunity from assessment on the basis of section 8 of the City of Bombay Land Revenue Act, 1876, it would not be proper to aHow them to change their front, and take up a stand wholly inconsistent with what they had taken, when that involved an investigation into facts which had not been made.l

       (2) Though the language of the section would more appropriately apply when the dispute was as to the quantum of assessment, the right to levy it not being itself controverted, it was open to the superior holder under section 8 of the Act to plead and prove that the State had no right to levy any assessment; and that the burden was on the person who pleaded a limitation on the right of the State to assess, to clearly and unequivocally establish it.2

       (3) Notwithstanding that the drafting is inartistic, the true import of section 2 of the Foras Act (Bombay Act VI of 1851)3 unmistakably is that while, on the one hand, the right of the Government to recover the assessment is saved, it is, on the other hand, limited to the amount then payable by the occupants.

       (4) When the Government acquires lands under the provisions of the Land Acquisition Act, it must be for a public purpose, and with a view to put them to that purpose, the Government acquires the sum total of all private interests subsisting in them. If the Government has itself an interest in the land it has only to acquire the other interests outstanding therein, so that it might be in a position to pass it on absolutely for public user. When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be no question of Government acquiring what is its own. An investigation into the nature and value of that interest will no doubt be necessary for determining the compensation payable for the interest outstanding in the claimants, but that would not make it the subject of acquisition.4

       (5) In its normal acceptation, "interest" means one or more of those rights which go to make up "ownership". It will include for example, mortgage, lease, charge, easement and the like, but the right to impose a tax on land is a prerogative right of the Crown, paramount to the ownership over the land and outside it. Under the scheme of the Land Acquisition Act, what is acquired is only the ownership over the lands, or the inferior rights comprised therein. Under section 8 of the Land Acquisition Act, 1857 (Act VI of 1857) the Government is to take the

       1.Section 8 of the City of Bombay Land Revenue Act, 1876, provides;

       "It shall be the duty of the Collector, subject to the orders of Government, to fix and to levy the assessment for land revenue.

       When there is no right on the part of the superior holder in limitation of the right of Government to assess, the assessment shall be fixed at the discretion of the Collector subject to the control of Government.

       When there is a right on the part of the superior holder in limitation of the right of Government, in consequence of a specific limit to assessment having been established and preserved, the assessment shall not exceed such specific iimit."

       2.(1937) L.R, 64 LA. 334: A.l.R, 1937 P.C. 271 relied upon.

       3.Section 2 of the Foras Act, 1951 reads: "From and after the said 1st day of July, the right of the said company in all of the said lands mentioned in the said plan No. I, except those mentioned in the said plan No.2, shall be extinguished in favour of the persons who shall then hold the same respectively as the immediate rent-payers to the said Company, saving the rents now severally payable in respect of such lands, which shall continue payable and recoverable by distress, or by any means by which I~nd reve~~e in Bombay is or shall be recoverable, under any Act or

       RegulatIOn .

       4.9 I.C. 341 and (1909) I.L,R. 34 Born. 618 approved. lands free from all other "estates, rights, title and interest", and «interest" must, in the context, be construed ejusdim generis with "estates" etc., as meaning right over lands, of the character of, but not amounting to an estate, and cannot include the prerogative right to assess the lands. It must accordingly be held that the effect of the land acquisition proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government, that the right of the latter to levy assessment was not the subject matter of those proceedings, and that if after the award the lands were not assessed to revenue, it was because there could be no question of the Government levying assessment on its Own lands.

       (6) The object of the Crown Grants Act No. XV of 1895 as declared in the preamble is to remove certain doubts "as to the extent and operation of the Transfer of Property Act, 1882, and, as to the power of the Crown to impose limitations and restrictions upon grants and other transfers of land made by it or under its authority." Section 2 enacts that the provisions of the Transfer of Property Act do not apply to Crown Grants. Then follows section 3 with the positive declaration that "all provisions, restrictions, conditions and limitations over" shall take effect according to their tenor. Reading the enactment as a whole, the scope of section 3 is that it saves, "provisions, restrictions, conditions and limitations over" which would be had under the provisions of the Transfer of Property Act, such as conditions in restraint of alienations or enjoyment repugnant to the nature of the estate, limitations offending the rule against perpetuities and the like. Section 3 must also be construed in the light of the preamble, and so construed it cannot have any bearing on the rights of the parties. Moreover, that section only enacts that "all provisions, restrictions, conditions and limitations over" shall take effect according to their tenor, and what is relied on is not any provision, restriction, condition or limitation over, in a sale deed executed by the Governor-Genera] which according to its tenor entitles the occupants to hold the land, rent-free, but the absolute character of the interest conveyed under the deed, section 3 does not in terms apply and does not lend support to the contention that an absolute sale of lands by the Government ipso facto confers on the purchasers a right to bold the lands free of revenue ..

       (7) The proposition that a Crown grant should be construed in favour of the Crown and against the grantee is in the nature of a rule of substantive law; and its scope is that whereas the transferee from a subject acquires, unless the contrary appears, all the rights which the transferor has in the property as enacted in section 8 of the Transfer of Property Act, a grantee from the Crown gets only what is granted by the deed, and nothing passes by implication. This really does not differ from the proposition that it should make no difference in the construction of the grant, whether I.he grantor was the Crown or a subject; for the question in either case was what had. been granted; and that must be determined on the language of the deed. What the Court has to do is to ascertain the intention of the grantor from the words of the document, and as the same words cannot be susceptible of two different meanings, it makes no difference whether they occur in a grant by the Crown or by the subject. If the words used in a grant by a subject would be effective to pass an interest, then those words must equally be effective to pass the same interest when they occur in a Crown grant.

        The deed in this case far from exempting the lands from liability to be assessed to revenue, expressly subjects them to it.

       (8) The contention that even if the land acquisition proceedings between 1864 and 1867 had not the effect of extinguishing the right of the Government to levy assessment, and that even if the deed conferred on the purchasers no right to hold the land revenue-free, the assessment which the Government was entitled to levy under section 8 of the City of Bombay Land Revenue Act, 1876, was limited to what was payable under the Foras Act No. VI of 1851, and that the appellant had no right to levy assessment at a rate, exceeding the same, cannot hold good. When the lands were acquired under the Land Acquisition Act No. VI of 1857, the entire "estate, right, title and interest" subsisting thereon became extinguished, and the lands vested in the Government absolutely freed from Foras tenure, and when they were sold by the Government the purchasers obtained them as free-hold and not as Foras lands. As the tenure under which the lands were originally held had become extinguished, as a result of the land acquisition proceedings, it was incapable of coming back to life, when the lands were sold.l

       (9) The Foras Act was repealed in 1870 by Act No. XIV of 1870 long prior to the date of the deed, and even if it is held that the Foras tenure revivtd in the hands of the purchasers under the deed, the rights under the Foras Act were no longer available in respect of the lands. As the lands had all been acquired under Act No. VI of 1857 between 1864 and 1867 there were no rights in respect of the lands which could subsist at the date of the repeal, and the rights claimed by the purchasers were not within the saving clause in S. 1 of Act XIV of 1870.

       (10) Accordingly, the right of the Government to levy assessment under section 8 of the City of Bombay Land Revenue Act was not limited by any right in the purchasers. - Bombay Foras Act (VI of 1851), section 2-Foras lands --incidents of acquisition under land Acquisition Act, 1857, between 1864 and 1867 and subsequently sold under a deed when no longer required for the purpose for which acquired-Right of Government to levy assessment under the Bombay City land Revenue Act, 1876, section 8 - Section 112-Appeal before the Supreme Court.

       Held: Where the respondents have, at all stages, claimed immunity from assessment on the basis of S. 8 of the Bombay City Land Revenue Act, 1876, it would not be proper to allow them in appeal before the Supreme Court to change their front, and take up a stand that they were not superior holders within S. 3(4) of the Act wholly inconsistent with what they had taken, when that involves an investigation into facts which has not been made. - Crown Grants Act, 1857, Section 3-Scope of-Absolute sale of lands by Government-Purchasers right to hold lands rent free-Rule that Crown grant should be construed in favour of Crown-Meaning of.