IMPORTANT POINT
A document creating interest of more than Rs.100 has to be registered.

JUDGMENT

Deepak Gupta, J.

1. The State of Madhya Pradesh enacted the Madhya Pradesh Ceiling on Agricultural Holdings Act, 1960 (hereinafter referred to as ‘the Act’). The Bill in this regard was published on 15th September, 1959 and the Act was published on 1st October, 1960 after receiving the assent of the President of India. Section 7 of the Act provided the maximum extent of land to be held by a person and when the Act was initially passed, a land holder was not entitled to hold land in excess of 28 standard acres. Standard acre was defined under Section 2(n) of the Act to mean one acre of perennially irrigated land or two acres of seasonally irrigated land or three acres of dry land. Section 4 of the Act provided that any transaction of land by the land holder by way of sale, gift, exchange, partition etc. could be verified by the competent authority, provided such transfer of land had been made after the date of publication of the Bill i.e. 15.09.1959. Sub-section 2 of Section 4 of the Act provided that this section would not apply to a transfer made by the land holder who does not hold land in excess of the ceiling area on the date of transfer. Section 5 of the Act restricts the transfer or sub-division of land after the coming into force of the Act till final order under Section 11 of the Act is passed unless the permission of the Collector in writing is taken before entering into the transaction.

2. One Phoolchand was the owner of 72 acres 75 decimals of land. Admittedly, this was dry land and, therefore, he was entitled to hold 84 acres of dry land under the Act. The Act was amended in the year 1972. We are only concerned with the Amendment Act of 1972 and the Second Amendment Act of 1972. Both these Acts came into force from 7th March, 1974. The maximum extent of holding was changed and where the holder of the land was a member of the family of less than 5 members, the family was entitled to retain 15 standard acres of land, and 18 standard acres of land where a family consisted of more than 5 persons. As per this amendment, Phoolchand was at the most entitled to retain 18 standard acres or 54 acres of dry land. Vide Second Amendment Act, 1972, Section 4 of the Act was amended and the competent authority was entitled to set aside any transaction entered into after 24th January, 1971 and before the appointed day, which is 7th March, 1974.

3. After the Act was amended, Phoolchand filed his return and in his return he did not say that he had leased out any land to Yashchandra, the original plaintiff who was also the original appellant before this Court, who is deceased and is now represented by his legal representatives. It is the admitted case of the parties that Yashchandra was related to Phoolchand. Yashchandra filed a petition before the competent authority under the Act claiming that he was an occupancy tenant on the eastern part of the land of Phoolchand measuring 25 acres and claimed that this land had been leased out to him vide lease deed dated 21st November, 1968 on a rental of Rs. 500/-per annum. He further claimed that since he was in occupation of the land he had got the rights of occupancy tenant under Section 169 of the Madhya Pradesh Land Revenue Code, 1959 (hereinafter referred to as ‘the Code’). The competent authority rejected the objections and declared 20.88 acres of land of Phoolchand as surplus under the Act.

4. Thereafter, Yashchandra filed a suit for declaration of his occupancy rights in the suit land on the same grounds. In this suit he claimed that Phoolchand had transferred 24 acres of land to him in 1968. In this suit a written statement was filed and in the written statement the State denied that Phoolchand had created any lease in favour of Yashchandra. However, it was admitted that the plaintiff was in cultivating possession of the land. The State, however, took the plea that the alleged transaction of lease is a sham transaction set up with an intention to defeat the provisions of the