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1959 Supreme(SC) 139
SUPREME COURT OF INDIA
14th August, 1959.
S.R. DAS, C.J.I., S.K. DAS, A.K. SARKAR, K.N. WANCHOO AND M. HIDAYATULLAH, JJ.
Sri Rajah Velugoti Venkata Sesha Varada Rajagopala Krishna Yachendra Bahadur Kumara Rajah, Venkatagiri, Appellant
Versus
State of A.P. and another, Respondents.
Civil Appeals Nos. 188 to 190 of 1958.
Advocates appeared
Mr. A. V. Viswanatha Sastri, Senior Advocate (M/s. V. Vedantachari and K. Sundararajan, Advocates, with him), for Appellant; Mr. H. N. Sanyal, Additional Solicitor General of India, (M/s. D. Venkatappiah Sastri and T. M. Sen, Advocates, with him), for Respondent No. 1; Mr. K. R. Chaudhuri, Advocate, for Respondent No. 2.
A.V.VISHWANATHA SASTRI, D.V.Sastry, H.N.SANYAL, K.R.CHAUDHARY, K.SUNDARARAJAN, T.M.SEN, V.VEDANTACHARI
Rights created after July 1, 1945, for over one year are unenforceable against the Government under the second proviso of Section 20(1) of the Abolition Act, without requiring the notice or compensation mandated by the third proviso and Section 20(2).
Headnote:(A) Madras Estate (Abolition and Conversion into Ryotwari) Act, 1948 - Section 20 - Validity and enforceability of leasehold rights - Rights created on or after 1st July, 1945, for a period exceeding one year are unenforceable against the Government under the second proviso to Section 20(1) - Such rights are not subject to the conditions of the third proviso, such as the requirement of public interest, three months' notice, or the payment of compensation under Section 20(2) (Paras 6, 7, 8).
(B) Statutory Interpretation - Provisos to a section must be construed to avoid repugnancy - Where one proviso makes a right unenforceable unconditionally and another provides for termination based on public interest and compensation, they must be construed as referring to different subjects (Para 7).
(C) Mineral Concession Rules, 1949 - Rule 47 - Statutory terms inserted into a lease by rules do not survive if the underlying lease is determined under the Abolition Act (Para 9).
Facts of the case:
A lease for slate quarries was granted for twenty years on a date subsequent to 1st July, 1945, but prior to the notification of the estate under the Abolition Act. The Government terminated the lease, holding it unenforceable under the second proviso to Section 20(1) of the Act. The lessee challenged the termination, contending that the Government was required to provide three months' notice and compensation as per the third proviso to Section 20(1) and Section 20(2).
Findings of Court:
The termination of the lease was valid. The second proviso to Section 20(1) creates an unconditional right for the Government to treat leases created after 1st July, 1945 (for more than one year) as unenforceable. The third proviso and the compensation mechanism in Section 20(2) apply only to rights created before 1st July, 1945.
Issues: Whether the termination of a lease created after 1st July, 1945, for a period exceeding one year, requires compliance with the conditions of the third proviso to Section 20(1) regarding notice and public interest, and whether such termination entitles the lessee to compensation under Section 20(2).
Ratio Decidendi: The second and third provisos to Section 20(1) operate in different spheres. The second proviso nullifies rights created after 1st July, 1945, to prevent the creation of interests in anticipation of abolition legislation, making them unenforceable without further conditions. The third proviso governs the termination of rights created before that date. If the third proviso applied to the second, the second would be rendered otiose.
Result: Appeals dismissed.
S.R. DAS, CJI. : The three appeals are directed against the judgment and order pronounced by a Bench of the Andhra Pradesh High Court on 20-11-1957, whereby three writ petitions, namely, No. 1 of 1956, No. 19 of 1957 and No. 470 of 1957, which had been filed by the appellant and were heard together, were dismissed with costs. These appeals have been filed with certificates granted by the High Court of Andhra Pradesh.
2. The circumstances under which the three writ petitions came to be filed by the appellant may now be narrated. It is alleged that on 10-1-1942, an agreement was entered into between the Rajah of Venkatagiri and one Sri Balumuri Nageswara Rao whereby the Rajah agreed to give annual leases in respect of certain slate quarries within his estate for five years in succession commencing from February 1942 if the Rajah was satisfied with the work carried on by the lessee during the preceding year. It was further stipulated that if the leases were given continuously for five years, then the lessee would be entitled at the end of the fifth year to obtain a lease from the Rajah for a period of 20 years commencing from the termination of the fifth year. On the expiry of the fifth year, however, the Rajah granted another lease to the said Balumuri Nageswara Rao for a short period commencing from February 1, 1947, and ending on November 30, 1947. On December 10, 1947, the said Balumuri Nageswara Rao is said to have assigned his right, title and interest under the said agreement dated January 10, 1942, to the appellant, one of the sons of the Rajah, The Rajah on the same day granted a lease for twenty years to the appellant. On September 7, 1949, the Venkatagiri estate was notified under S. 3 of the Madras Estate (Abolition and Conversion into Ryotwari) Act, 1948 (Mad. XXVI of 1948), hereinafter referred to as the Abolition Act. On the same date the appellant applied to the Collector for confirmation of the lease granted by the Rajah to him. Nothing appears to have happened until February 12, 1952, when a notice was issued from the office of the Board of Revenue (Andhra) calling upon the appellant to show cause within two months from the date of receipt of that notice as to why the lease should not be terminated without any compensation under the second proviso to S. 20(1) of the Abolition Act. The appellant showed cause which apparently did not satisfy the said authorities. Instructions appear to have been issued to the manager of the Venkatagiri estate requiring him to take over possession of the slate quarries which were then being worked by the appellant immediately after the expiry of two months notice issued to him. The appellant promptly filed a Writ Petition No. 287 of 1952 in the Madras High Court praying for the issue of a writ in the nature of a writ of mandamus directing the Madras State to forbear from terminating the leasehold right of the petitioner in the slate quarries and from interfering with his possession and working of the slate quarries and other ancillary reliefs. The writ petition having come up for hearing before Umamaheswaram J., the learned Judge on July 18, 1955, and an order directing the Government to hold an enquiry under S. 20 of the Abolition Act and decide whether the lease had been granted prior or subsequent to July 1, 1945. The order required the Government to hold that enquiry and pass the appropriate orders within three months from the date of that order. The Board of Revenue caused an enquiry to be made by the Director of Settlements who, after taking evidence, oral and documentary, made his report to the Board of Revenue. The Board of Revenue submitted a report to the Government on October 20, 1955, and the Government after considering the Board s report instructed the latter to dispose of the case on merits. Thereupon, the board of Revenue passed an order on December 27, 1955, declaring that the lease to the appellant had been granted subsequent to July 1, 1945, and that, as
