Judgment

SHAH, J. :

By an agreement called Kowl dated October 2, 1830 the Principal Collector of Konkan conferred on behalf of the East India Company "farm rights" upon one Cursetjee Cowasjee Banajee - hereinafter called "Banajee" - in seven villages (1) Mogra, (2) Wasivre, (3) Bandivili, (4) Majas, (5) Part Pahadi, (6) Goregaon and (7) Poisar on terms and conditions set out therein. By two letters dated October 17, 1835 and July 17, 1841 the original cowl was modified and Banajee was required to pay an amount to the East India Company of Rs. 2,708/7 /- per annum in consideration of the benefits conferred upon him by the said cowl. Banajee constructed extensive salt works in the villages and expended Rs. 2 lakhs in improving and developing the villages. On September 22, 1847 the East India Company granted to Banajee the seven villages on certain terms, freed from the covenants of the cowl, and also from liability to pay assessment on land revenue in consideration of the amount spent by him for improving the villages, and an amount of Rs. 30,000/-paid by him to the East India Company. The villages were held and enjoyed by the successors of Banajee under the terms of the grant without payment of land revenue till the year 1952. The Legislature of the Bombay State enacted the Salstte Estates (Land Revenue Exemption Abolition) Act, XLVII of 1951 (hereinafter called the Act) which received the assent of the President on Jan. 4, 1952 and was brought into force on March 1, 1952. The Act was enacted as a measure of agrarian reform and formed part of a pattern of legislation undertaken by the State of Bombay to abolish the rights of intermediaries between the State and the cultivator of the soil. The Act provided for abolition of exemptions from payment of land revenue enjoyed by estate-holders, in certain specified villages in the Island of Salsette, and for the vesting of waste lands in the villages.

2. The Collector of Bombay Suburban District by his letter dated February 28, 1952 informed the appellant - who is the successor-in-interest of Banajee under the grant that with effect from March 1, 1952 as provided by S. 4 of the Act all waste lands which were not the property of the estate-holder under the kowl and all waste lands which had been demised in the kowl as the property of the estateholder but which had not been appropriated before August 14, 1951 and all other kinds of property referred to in S. 37 of the Land Revenue Code and which were not the property of any individual or an aggregate of persons legally capable of holding the same shall vest in the Government. He also invited attention to the provisions of Ss. 3 and 5 of the Act and informed the appellant that the Bombay Land Revenue Code will apply to all lands of the appellant s villages with effect from March 1, 1952 and directed the appellant from that date not "to collect land revenue or rent as the case may be in respect of the lands to which the provisions of the Act" applied. By letter dated March 5, 1952 the appellant submitted that the seven villages were held as absolute owner under and by virtue of the indenture of conveyance dated September 22, 1847 between the East India Company and Banajee and that under the terms of the grant all the lands in the villages were absolutely and for ever freed and discharged from the obligations of the Kowl of 1830 and also freed and discharged from all liability to pay land revenue under Regulation XVII of 1827 and from all liability for assessment in the nature of land revenue, and that the Act did not and could act apply to the lands of the appellant in the above-mentioned villages - the appellant being the absolute owner of the land in the villages. By letter dated June 25, 1952 the Collector informed the appellant that the provisions of the Act were applicable to the seven villages and the requisition to treat the villages otherwise could not be granted.

3. On November 28, 1952 the appellant commenced an action against the