Judgment

VENKATARAMIAH, J. :- Labh Singh, respondent No. 1 herein, was the owner of certain agricultural lands in three villages situated in the district of Kapurthala, namely, village Karahal Nauabad, village Isherwa and village Brindpur measuring in all 32-8 standard acres. Of them an extent of 7-4 standard acres of land situated in village Brindpur had been mortgaged with possession by him in favour of one Lachman Singh of village Khera Dona before the Pepsu Tenancy and Agricultural Lands Act, 1955 (Pepsu Act 13 of 1955) (hereinafter referred to as the Act) came into force. The mortgage was subsisting when Chapter IV-A was inserted by the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act, 1956 (Pepsu Act No. 15 of 1956) into the Act. Chapter IV-A of the Act which provided for the imposition of ceiling on land and acquisition and disposal of surplus area consisted of sections 32-A to, 32-NN. Section 32-A of the Act read as follows:

"32-A. Ceiling on land.-

(1) Notwithstanding anything to the contrary in any law, custom, usage or agreement, no person shall he entitled to own or hold as landowner or tenant land under his personal cultivation within the State which exceeds in the aggregate the permissible limit.

(2) For the purposes of computing the permissible limit under sub-section (1), the provisions of clauses (d) and (e) of sub-section (2) of section 3 shall not apply."

2. The permissible limit for the purposes of the Act was fixed at 30 standard acres of land by section 3 thereof Section 32-B of the Act provided that any person who on the commencement of the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act, 1956 owned or held as landowner or tenant land under his personal cultivation, which in the aggregate exceeded the permissible limit should within a period of one month from the commencement of the Pepsu Tenancy and Agricultural Lands (Amendment) Ordinance, 1958 furnish to the Collector a return giving the particulars of all his lands in the prescribed form and manner and stating therein his selection of the parcel or parcels of land not exceeding in the aggregate the permissible limit which he desired to retain and the lands in respect of which he claimed exemption from the ceiling under the provisions of Chapter IV-A of the Act. It was further provided that such person should state in the return any transfer or other disposition of land made by him after 21st August, 1956 and where a person had furnished a return before the commencement of the Pepsu Tenancy and Agricultural Lands (Amendment) Ordinance, 1958 he should within the aforesaid period intimate to the Collector any such transfer or other disposition of land made by him. Clause (f) of section 2 of the Act defined the expression landowner. The explanation added to the said clause provided that in respect of land mortgaged with possession the mortgagee should be deemed to be the landowner. In view of the above definition the extent of 7-4 standard acres of land which was under mortgage with possession at the commencement of the Act was not to be included in the holding of Labh Singh for purposes of determining the surplus land in his hand but the mortgagee had to be treated as the landowner in respect of that land. Consequently, the remaining extent of land in the possession of Labh Singh being less than 30 standard acres he was treated as a small landowner not liable to surrender any land as surplus land under the provisions of the Act. But on April 1, 1959, Labh Singh got back the possession of 7-4 standard acres of land by redeeming the mortgage. On redemption the total extent of land in his possession became 32-8 standard acres which was in excess of 30 standard acres which had been prescribed by the Act as the permissible limit. Labh Singh did not file any return informing the authority concerned that his holding had exceeded the permissible limit. But on coming to know that Labh Singh had in his possession land in excess of the permissibl