Fatma Haji All Mohammad Haji and Others vs The State of Bombay

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 28 of 1950

Decision Date: 5 February 1951

Coram: Mehr Chand Mahajan, Saiyid Fazal Ali, B.K. Mukherjea, N. Chandrasekhara Aiyar

In the case titled Fatma Haji All Mohammad Haji and Others versus The State of Bombay, the Supreme Court of India delivered its judgment on 5 February 1951. The judgment was authored by Justice Mehr Chand Mahajan, and the bench comprised Justice Mehr Chand Mahajan, Justice Saiyid Fazal Ali, Justice B. K. Mukherjea and Justice N. Chandrasekhara Aiyar. The petitioners were Fatma Haji, All Mohammad Haji and several others, while the respondent was the State of Bombay. The decision is reported in the 1951 volume of the All India Reporter at page 180 and in the Supreme Court Reporter at page 266. The dispute concerned the Bombay Land Revenue Code of 1879, specifically section 48 and the rules made thereunder, particularly rule 92, which deals with agricultural land that has been converted to non-agricultural use and the Collector’s duty to alter the assessment of such land.

Rule 92 provides that when land that was originally assessed for agricultural purposes is subsequently used for a purpose not connected with agriculture, the assessment of that land must be altered under section 48(2) by the Collector, unless the Government issues a clear and unambiguous direction to the contrary. The court held that the rule imposes an imperative duty on the Collector, and any governmental power to prevent the Collector from acting according to the rule must be exercised in unmistakable terms because it affects the civil rights of the persons concerned. Furthermore, when the Government does not pass a resolution or issue a direction, but merely confirms on appeal an order of the Collector that rejected an application for a non-agricultural assessment of agricultural lands that had been used for building, such confirmation does not amount to a direction to act otherwise under rule 92. Consequently, the applicant was entitled to have the assessment of the lands altered in accordance with section 48(2) and the provisions of rules 81 to 87 as stipulated in rule 92.

The appeal before the Supreme Court was Civil Appeal No. 28 of 1950, taken from a judgment and decree of the High Court of Judicature at Bombay dated 19 March 1945, which had modified the decree of the trial court and partially decreed the plaintiff’s suit. The appellants were the legal representatives of the original plaintiff, Haji Ali Mohamed Haji Cassum, and the respondent was the State of Bombay. The counsel appearing for the appellants were led by a senior advocate, while the Attorney-General for India represented the respondent. The judgment was delivered by Justice Mahajan.

The controversy, in brief, concerned the village of Dahisar which originally formed part of the Malad Estate comprising eight villages. The East India Company conveyed the entire estate to two Dady brothers by a deed of indenture dated 25 January 1819 for valuable consideration, and by that conveyance the lands in all eight villages were transferred absolutely to the purchasers. The Company covenanted that the purchasers, their heirs and assigns should peaceably and quietly enjoy the villages and receive the rents and profits therefrom without hindrance or interruption from the Company. By a sale deed dated 13 December 1900, Haji Cassum, the father of the plaintiff, purchased the village of Dahisar from its proprietors for the sum of Rs. 1,30,000. Following Haji Cassum’s death, the plaintiff succeeded to ownership of the village and consequently received rents and assessments from the tenants and land-holders in accordance with the rights prevailing under the survey settlement that had been effected in the village around the year 1864-65. In 1879 the Bombay Land Revenue Code was enacted. Section 48 of the Code reads: “48. (1) The land revenue leviable on any land under the provisions of this Act shall be assessed, or shall be deemed to have been assessed, as the case may be, with reference to the use of the land—(a) for the purpose of agriculture, (b) for the purpose of building, and (c) for a purpose other than agriculture or building. (2) Where land assessed for use for any purpose is used for any other purpose, the assessment fixed under the provisions of this Act upon such land shall, notwithstanding that the term for which such assessment may have been fixed has not expired, be liable to be altered and fixed at a different rate by such authority and subject to such rules as the Provincial Government may prescribe in this behalf ….” After the Act came into force, the Government prepared rules under the provisions of section 214 for promulgation. The inamdars appealed to the Government that the rules should be framed so as not to prejudice their rights under the conveyances executed by the Company in their favour. The draft rules were promulgated by a notification issued on 5 June 1907. On that date the Government adopted a resolution ordering the promulgation of the rules and also gave an assurance to the inamdars, stating: “Government will, however, be prepared to amend or abrogate these rules if they are found to be detrimental in any material respects to the interests of the inamdars.” Rule 92, one of the rules issued under the Act, provides: “When land assessed for purposes of agriculture only is subsequently used for any purpose unconnected with agriculture the assessment upon the land so used shall, unless otherwise directed by Government, be altered under sub-section (2) of section 48 by the collector in accordance with rules 81 to 87 inclusive.”

The Court explained that Rule 92, which was promulgated under the provisions of the Act, directed that when land which had been assessed solely for agricultural purposes was later used for any purpose unrelated to agriculture, the assessment of that land should, unless the Government gave contrary directions, be altered under subsection (2) of section 48 by the collector in accordance with Rules 81 to 87 inclusive. On 25 July 1923 the plaintiff applied to the Commissioner of Bombay, Suburban District, for a revision of the survey of Dahisar village. The plaintiff executed an agreement under section 216 of the Bombay Land Revenue Code and filed the formal application required by the Code and the related rules. By a letter dated 14 March 1925 the Commissioner authorised the extension of the provisions of chapters 8 and 9 of the Land Revenue Code to the village in question. The plaintiff also paid the required expenses for the revision. The revision was carried out by the Superintendent of the Land Records, who submitted his report to the Commissioner on 15 December 1926; this report was subsequently sanctioned by the Government. The order confirming the revised survey was communicated to the plaintiff on 23 December 1927. Under the revised survey the assessment of the village lands increased from Rs 4,217 to Rs 6,057-3-2, and from that date the plaintiff began collecting the higher assessment from the village tenants. During the revision it was discovered that nine plots, comprising eleven field numbers that had formerly been agricultural, had been built upon and were now being used for non-agricultural purposes. The survey officer grouped those plots separately, recorded them as “kharaba”, and levied no assessment—neither agricultural nor non-agricultural—on them, so the plaintiff could not collect any assessment on those plots after 1926.

On 30 April 1934 the plaintiff addressed a request to the Collector asking that non-agricultural assessment be imposed on the nine plots. The Collector rejected the request by a letter dated 17 July 1935, stating: “With reference to your letter dated 30-4-1934, I have the honour to state that I regret your request cannot be granted.” The Court observed that this refusal contravened Rule 92, which imposes on the Collector a duty to alter the assessment unless the Government has issued a contrary direction. No such direction had been issued by the Government as of 17 July 1935. The Court noted that had the Collector fulfilled his duty under Rule 92, the protracted litigation that ensued might have been avoided. Consequently, the plaintiff appealed the Collector’s order to the Commissioner. In his appeal the plaintiff pointed out that additional lands in the village had been converted to non-agricultural uses after the 1926 survey revision. The Commissioner declined to intervene. The Collector later conveyed this information to the plaintiff’s counsel on 22 May 1937. The plaintiff’s appeal against the Commissioner’s decision gave rise to further proceedings.

After the Commissioner’s order, the plaintiff appealed to the Governor in Council. On 20 December 1937 the plaintiff received a communication from the Government addressed to the Commissioner. The letter began with a courteous greeting to the Commissioner of the Northern Division and referred to his earlier correspondence, letter No L.N.D. 3124 dated 20 April 1936. The Government then drew the Commissioner’s attention to the orders issued in Government Resolution No s235/3a dated 8 March 1937 and stated that the Government confirmed the action taken by the Collector of the Bombay Suburban District in refusing the Khot’s request to levy a non-agricultural assessment in the village of Dahisar. The letter concluded that this confirmation was issued by order of the Governor in Council and was signed by the Under Secretary to the Government of Bombay.

Seeking to determine whether any formal Government resolution existed as referenced in that communication, the plaintiff, while the suit was pending, served an interrogatory on the Government of the State of Bombay. The interrogatory asked: when did the Government reach the decision not to assess the lands listed in Schedule II of the plaint and other lands under rule 92, as mentioned in paragraph 8 of the written statement; and requested that a copy of any such decision, if embodied in a Government resolution, be produced together with the opinion of the Government officers who may have concurred with it. The Government, responding on behalf of the State, supplied a memorandum from the Revenue Department, No 5235-B/33 dated 8 March 1937, which merely confirmed the Collector’s action in rejecting the proprietor’s request for a non-agricultural assessment. The answer indicated that, acting under rule 92, the Government neither adopted a separate resolution nor issued any notification directing the Collector to act contrary to the provisions of that rule; it simply affirmed the Collector’s order rejecting the plaintiff’s request.

Between 1927 and 1937 a considerable number of plots listed in Schedule II had been converted to non-agricultural uses by the tenants occupying them, and several buildings had been erected on those plots. Because the plaintiff was unable to persuade the Government to assess these lands under rule 92, he served a notice under section 80 of the Code of Civil Procedure and instituted the present suit. The suit sought, first, a declaration that the plaintiff was entitled to have a non-agricultural assessment made on all lands in the village of Dahisar that were presently used, or might subsequently be used, for purposes other than agriculture; and second, an order directing the Collector of the Bombay Suburban District to determine the amount of non-agricultural assessment on the lands described in Schedules I and II of the plaint, to levy that assessment under clause 2 of rule 96, and to pay the amount to the plaintiff, or alternatively, to grant such other relief as the Court might consider appropriate.

The plaintiff sought an order directing the defendant to issue a commission to him under section 88 of the Land Revenue Code. Schedule I listed nine parcels of land that had been converted to non-agricultural use before the 1926 survey, while Schedule II identified lands that had been so converted during the period from 1926 up to the filing of the suit. In addition to the declaration, the plaintiff claimed monetary compensation: he asked for Rs 120 as damages for the loss of agricultural assessment over six years relating to the lands shown in Schedule I, and he sought Rs 300 as damages for the loss of non-agricultural assessment concerning the remaining lands. He further prayed for future damages and costs. The State Government opposed the suit on several grounds, contending that the action was barred by section 4(c) of the Revenue Jurisdiction Act and by article 14 of the Indian Limitation Act. On the merits, the government argued that the survey officer and the Collector were lawfully within their authority when they refused to levy non-agricultural assessment on the lands included in the two schedules, and that a civil court could not review the Government’s discretionary exercise in such matters. The trial judge rejected all the technical objections raised by the defendant and, on the merits, held that the Collector’s refusal to levy non-agricultural assessment on the disputed lands was improper. Accordingly, the judge granted the declaration sought by the plaintiff, but he declined to grant any further relief. He rejected the request for a direction ordering the levy of non-agricultural assessment on the lands in both schedules and the payment of that assessment to the plaintiff, although he remarked that it would be advisable for the Government to levy such assessment and remit it to the plaintiff. Two appeals were filed in the High Court against the trial judge’s decree. The High Court modified the decree by granting the plaintiff a declaration that he was entitled to receive non-agricultural assessment on all lands presently used or that might hereafter be used for non-agricultural purposes. It ordered the defendant to levy the altered assessment on the lands listed in Schedule I and awarded consequential damages to the plaintiff in respect of those lands. Regarding the lands in Schedule II, however, the plaintiff’s suit for a direction to assess and levy non-agricultural assessment was dismissed. The court distinguished between lands converted before the 1926 survey and those converted thereafter. It held that the survey officer had exceeded his authority by declining to make non-agricultural assessment on the former category, rendering his action ultra vires, and therefore granted relief as requested. For the latter category, the court concluded that the decision to alter the assessment lay within the Government’s discretion and could not be questioned by the court.

The Court observed that the Government possessed discretion to order an alteration of the assessment on such lands and that this discretion could not be questioned in a court of law. The plaintiff, dissatisfied with that part of the decision, made an application for leave to appeal to the Privy Council on 15 September 1945. While the application was pending, the plaintiff died and his heirs and executors were impleaded as his legal representatives. A certificate for leave to appeal to the Privy Council was granted on 1 February 1947, and the appeal preferred under the certificate was now before the Court for decision. The Court noted that there was no controversy in the appeal concerning the reliefs already granted to the plaintiff by the High Court; the appeal concerned only the further relief that had been refused to the plaintiff in respect of the lands mentioned in schedule II. On behalf of the appellant it was contended that, under the terms of the conveyance dated 25 January 1819 and the covenants contained therein, it was not open to the Government or the Collector to refuse the alteration of the assessment claimed by the plaintiff, and that the Government could not give any direction under rule 92 that would be contrary to those covenants and assurances. It was submitted that the Government was bound to use its power to levy assessment as trustee for the transferee and that the exercise of this power could not be arbitrarily refused. Further, it was argued that the Government Resolution dated 5 June 1907 clearly indicated that the rules framed under the Land Revenue Code were not intended to adversely affect owners of alienated lands and that the Collector was bound to make an assessment as required by the plaintiff. Finally, it was urged that, as a matter of fact, the Government had never exercised its power under rule 92 and had never given a direction to the Collector to a contrary effect, and that the mere affirmation of the erroneous order of the Collector by the Government did not amount to a direction contemplated by the provisions of rule 92. Having considered the case in all its aspects, the Court reached the decision that the High Court’s refusal of relief to the plaintiff in respect of the lands mentioned in schedule II should be reversed. The Court explained that rule 92, cited earlier in the judgment, is expressed in imperative terms and directs the Collector to alter the assessment when agricultural lands are converted to non-agricultural use. The Collector therefore has no option in the matter and, as soon as an application is made to him, he must proceed to make an assessment and levy it on the non-agricultural lands. When the Collector declined to accede to the plaintiff’s request, he acted in contravention of the clear provisions of the rule, because, as the Court acknowledged, at that time no “directions to the contrary” had been given to him by the Government. There was no resolution of the Government in existence and no notification had been issued under the provisions of rule 92 directing the Collector not to make an alteration in the assessment when required to do so. The Commissioner, in dismissing the plaintiff’s appeal, also contravened the provisions of rule 92. When the matter went up in appeal to the Governor in Council, no decision was taken under the provisions of rule 92. The High Court had assumed that the confirmation of the Collector’s action by the Government amounted to a direction by the Government to the contrary in respect of the lands in question, a conclusion with which the Court was unable to agree.

There was no existing government resolution and no notification had been issued under rule 92 directing the Collector to refrain from making an alteration in the assessment when it was required. The Commissioner, in dismissing the plaintiff’s appeal, also acted contrary to the provisions of rule 92. When the matter was appealed to the Governor in Council, no decision was taken under rule 92. The High Court had assumed that the Government’s confirmation of the Collector’s action amounted to a contrary direction with respect to the lands involved, but the Court was unable to agree with that conclusion. The Court observed that when the Government is empowered to give directions to the Collector not to act in accordance with the mandatory provisions of a rule obliging the Collector to make an altered assessment, such power must be exercised in clear and unambiguous terms because it affects the civil rights of the persons concerned, and any exercise of that power must be notified in the usual manner in which such decisions are made known to the public. Counsel for the plaintiff conceded that no such decision or direction under rule 92 had been taken by the Government; consequently, the Government’s dismissal of the plaintiff’s appeal and its affirmation of an erroneous order of the Collector could not be treated as action taken under rule 92. In these circumstances the plaintiff was clearly entitled to further relief concerning the lands described in schedule II, and a direction should have been issued to the State Government to make an altered assessment on the non-agricultural lands, levy it, and pay the amount to the plaintiff. Counsel for the plaintiff argued that the true effect of the provisions contained in section 48(2) and rule 92 was that the Government was not bound to levy the altered assessment on lands converted to non-agricultural use, that the section merely made the persons in possession of the land liable for such assessment without obligating the Government to impose it, and that the court lacked jurisdiction to interfere with the Government’s discretion in the matter. The Court held that when a liability is imposed by statute, that liability cannot be defeated by any discretion exercised by the Government or by rules that may negate that liability; however, it was unnecessary to settle the point definitively because the appeal was decided otherwise. It was also unnecessary to express an opinion on the precise scope of the power conferred on the Government by the wording of rule 92. The plaintiff’s counsel appropriately did not press the appeal regarding the claim for damages concerning the lands in schedule II, and the plaintiff’s suit on that point therefore fails. For the reasons stated above the appeal is

The appellate court allowed the appeal and accordingly issued a decree granting the plaintiff's suit, ordering that the plaintiff be awarded costs. However, the decree expressly excluded any award of damages relating to the parcels of land that were listed in Schedule II of the pleadings. The court therefore held that the plaintiff's claim for monetary compensation for the Schedule II lands could not succeed, and the suit with respect to those specific lands was dismissed. The order for costs was made against the defendant and was to be borne by the State in the amount determined by the court. The costs awarded to the plaintiff were to be borne by the defendant, reflecting the principle that the party who unsuccessfully defended the claim should bear the expense. The decree specified that the costs would be calculated in accordance with the prevailing rules governing court fees and expenses. No further relief was granted in relation to the Schedule II lands beyond the direction to assess and levy the appropriate amount. Consequently, the plaintiff's claim for damages concerning those parcels was left without a monetary award, and the suit on that particular issue was dismissed. The judgment also affirmed the lower court's earlier finding that the conversion of land to non-agricultural use did not extinguish the statutory assessment liability. It was held that the statutory provision imposed a duty on the landholder, which the government could not waive by discretionary action.

The court further directed the defendant to carry out a fresh valuation of the lands identified in Schedule II. The valuation was to be performed in exactly the same manner that had been applied to the lands enumerated in Schedule I. After determining the appropriate amount, the defendant was ordered to levy the assessed sum and to remit the collected amount directly to the plaintiff. The appellate authority thereby confirmed that the assessment and collection procedures applicable to Schedule I lands would be replicated for Schedule II lands. The appeal was consequently affirmed, and the decision of the lower court was set aside where it conflicted with this decree. The assessment fee, once levied, was to be paid without any deduction to the plaintiff as compensation for the conversion of the land. The court stressed that the procedure must follow the statutory provisions governing land valuation and tax collection, ensuring uniformity between the two schedules. Compliance with the assessment and payment order was to be monitored by the appropriate government department to guarantee timely execution. Failure to obey the assessment directive would constitute a breach of the decree and could result in further legal consequences. The parties were advised that the costs awarded to the plaintiff covered all litigation expenses incurred up to the date of this judgment. The appellant was represented by an agent named K.J. Kale, while the respondent was represented by an agent named P.A. Mehta.