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PATNA HIGH COURT
V.Ramaswami and Sarjoo Prasad JJ.
Janakinath Roy
Versus
State Of Bihar
Miscellaneous Judicial Case No. 238 of 1952 ; 242 of 1952 ;
Decided On : DECEMBER 22, 1952
BIHAR LAND REFORMS ACT - ACQUISITION OF ZAMINDARI ESTATES - APPLICABILITY TO INCORPORATED COMPANIES - CONSTITUTIONALITY - INTERPRETATION - Bihar Land Reforms Act, 1950.
Fact of the Case:
Two incorporated companies, Raja Janakinath Roy and Narendranath Roy & Co. Ltd. and Motipur Zamindari Company Ltd., challenged the Bihar Land Reforms Act, 1950, claiming that it did not apply to the zamindari properties of incorporated companies. The companies argued that the Act was unconstitutional as it encroached upon the legislative powers of the Union and that the State Legislature did not intend to apply the Act to incorporated companies.
Finding of the Court:
The Court held that the Bihar Land Reforms Act was constitutionally valid and applied to the zamindari assets of incorporated companies. The Court found that the Act was legislation in pith and substance with respect to acquisitioning land, and not with respect to trading corporations. The Court also held that the State Legislature intended the Act to apply to the zamindari assets of incorporated companies, as the purpose of the Act was to prevent the concentration of big blocks of land in the hands of a few individuals and to distribute the ownership and control of land for the general benefit of the community.
Issues: 1. Whether the Bihar Land Reforms Act, 1950, applied to the zamindari properties of incorporated companies. 2. Whether the Act was unconstitutional as it encroached upon the legislative powers of the Union. 3. Whether the State Legislature intended to apply the Act to incorporated companies.
Ratio Decidendi: 1. The Court held that the Bihar Land Reforms Act was legislation in pith and substance with respect to acquisitioning land, and not with respect to trading corporations. Therefore, the Act was constitutionally valid even if it incidentally trenched on matters reserved for Union Legislature. 2. The Court found that the State Legislature intended the Act to apply to the zamindari assets of incorporated companies, as the purpose of the Act was to prevent the concentration of big blocks of land in the hands of a few individuals and to distribute the ownership and control of land for the general benefit of the community.
Final Decision: The Court dismissed both applications challenging the Bihar Land Reforms Act, 1950, with costs.
Ramaswami, J.
1. In these two applications, which have been heard together an important question of law arises, viz., whether the Bihar Land Reforms Act is upon its true construction intended to apply to the Zamindari estate of companies incorporated under the Indian Companies Act of 1913.
2. In Miscellaneous Judicial case No. 242 the petitioner is an incorporated company called Raja Janakinath Roy and Narendranath Roy & Co. Ltd. The Company was registered in the year 1933 and its head-office is located at Calcutta. One of the objects of the company was to own and deal in Zamindari land and house properties in the State of Bengal and Bihar. It is alleged on petitioners behalf that on 6-11-1951, the State of Bihar acting under its authority under Sec.3(1), Bihar Land Reforms Act, issued a notification declaring that the proprietary estates of the petitioner have passed to and become vested in the State of Bihar. On 8-6-1952, the State Government issued notice to the petitioner under Sec. 4 (g) of the Act requiring that the possession of the properties should be given to the Collector on the date specified in the notice. The petitioner was also ordered under Sec. 40 of the Act to produce documents, papers, and registers relating to the Zamindari estate. It is contended on behalf of the petitioner that on its proper construction the Bihar Land Reforms Act did not operate on the Zamindari properties of the incorporated companies. The petitioner submits that the notification issued by the State Government under Sec.3 (1) and the notices issued under Sections 4 (g) and 40 of the Act were illegal, void and without jurisdiction. The petitioner, therefore, prays that a writ in the nature of mandamus should be issued to the State of Bihar commanding it not to take possession of the Zamindari estates owned by the petitioner.
3. In Miscellaneous Judicial Case No. 238 the material facts are similar. In this case the petitioner is Motipur Zamindari Company Ltd., which has its registered office at Motipur within the State of Bihar, The notification under Sec.3 (1) was issued by the State Government on 25-9-1950, declaring that the properties of the petitioner had vested in the State of Bihar. There is an additional ground mentioned in the petitioners affidavit, viz., that the petitioner is a subsidiary of the Motipur Sugar Factory, Ltd., to which the petitioner supplies sugar-cane; that if the State acquires the Zamindari estate of the petitioner, the production of sugar in the Motipur Sugar Factory will be seriously affected. It is said that the control of Sugar industry has been declared by Parliament by law to be expedient in the public interest. It is alleged that Sugar industry falls under item 52 of the Union List and the Zamindari properties of the petitioner cannot be acquired under the Bihar Land Reforms Act.
4. The main question to be determined is whether upon a proper interpretation, the Bihar Land Reforms Act is intended to apply to companies incorporated under the Indian Companies Act (Act 7 of 1913).
5. The argument presented on behalf of the petitioner is that the State Legislature has no authority to legislate with respect to trading corporations or with non-trading corporations whose objects are not confined to one State. Mr. P.R. Das referred to entry Nos. 43, 44 and 45 of List I. Entry No. 43 relates to "Incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies." Entry No. 44 is:
"Incorporation, regulation and winding up of corporations, whether trading or not, with objects not confined to one State, but not including universities." Entry No. 45 relates to "banking."
Learned Counsel also referred to entry No. 32 in List II which relates to "Incorporation, regulation and winding up of corporations other than those specified in List I."
It was contended by the learned counsel that if the impugned Act operated on
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