The State Of Assam vs Keshab Prasad Singh And Another

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 176 and 176-A of 1952

Decision Date: 14 April 1953

Coram: Vivian Bose, Mehr Chand Mahajan, B. Jagannadhadas

The State of Assam versus Keshab Prasad Singh and another was decided on 14 April 1953 by the Supreme Court of India. The judgment was authored by Justice Vivian Bose, and the bench was composed of Justices Vivian Bose, Mehr Chand Mahajan and B. Jagannadhadas. The petitioner in the proceedings was the State of Assam and the respondents were Keshab Prasad Singh and another individual. The case is reported in the year 1953 at AIR 309 and in the Supreme Court Reports at page 865. It is also cited in the following law reports: RF 1954 SC 592, R 1956 SC 640, and E 1957 SC 377. The statutory provision involved was the Assam Land and Revenue Regulation (1 of 1816), specifically section sixteen together with Rules 190, 190A and 191, which deal with the settlement of fisheries, direct settlement under rule 190A following an auction conducted by the Deputy Commissioner, and the question of whether such settlement is an act of the Deputy Commissioner under the Rules or an executive act of the State, as well as the maintainability of an appeal to the High Court.

The headnote of the judgment explains that the Government of Assam, wishing to settle a fishery directly under rule 190A of the rules framed under the Assam Land and Revenue Regulation of 1886, directed the Deputy Commissioner concerned to put the fishery up for auction and to forward the list of bids to the Government together with his recommendation for direct settlement. The Deputy Commissioner proceeded to hold the auction and submitted the bid list, recommending the first respondent as the successful bidder. The Government then authorised the settlement of the fishery in favour of the first respondent, informed him that his bid had been accepted and directed him to pay the required deposits. On the same day the Government received two further petitions requesting a reconsideration of the orders it had issued. Three weeks later the Government reviewed its earlier decision and instead settled the fishery with a different person. The first respondent consequently filed an appeal before the High Court under rule 190, which provides that all orders of a Deputy Commissioner made under these rules are appealable to the High Court.

The Court held that the words “except with the previous sanction of the Provincial Government” contained in rule 190A do not allow the Provincial Government, whenever it wishes, to remove the transaction entirely from the statutory protection offered by the Regulation and to dispose of it by an executive act. Such an interpretation would cause rule 190A to run counter to section sixteen of the Regulation, which requires that these sales be made under and in accordance with the Rules. The deviation contemplated by rule 190A was a deviation that remained within the Rules themselves. Because the Deputy Commissioner was the sole authority competent to settle these fisheries, subject to the required sanction, both the cancellation of the first settlement and the subsequent resettlement were acts of the Deputy Commissioner, even though the Deputy Commissioner may have acted under the direction and orders of the Government. Accordingly, the High Court possessed jurisdiction to entertain the appeal under rule 190. The judgment of the High Court of Assam was therefore affirmed.

The matter arose under the civil appellate jurisdiction of the Supreme Court. It involved Civil Appeals numbered 176 and 176-A of 1952. Special leave to appeal was granted by the Supreme Court on 20 February 1952 and on 23 May 1952, respectively, from the judgment and order dated 6 December 1951 of the High Court of Judicature at Gauhati in its revenue appellate jurisdiction, which was Revenue Appeal No. 65 (M) of 1951.

On 6 December 1951 the High Court of Judicature at Gauhati issued a judgment and order in Revenue Appeal No 65 (M) of 1951, exercising its revenue appellate jurisdiction. The appeal was reported in the Deka J. series. In the subsequent civil appeals numbered 176 and 176-A, the Solicitor-General for India, assisted by counsel, represented the appellant in civil appeal 176, while counsel for the respondent in civil appeal 176 and counsel for respondent 2, who was also the appellant in civil appeal 176-A, were engaged. The civil judgments were delivered on 14 April 1953 by Justice Bose. The case concerned a dispute arising from the actions of the State Government of Assam, which had originally granted a lease of a fishery to the first respondent, subsequently cancelled that lease, and re-granted the lease to another party. The State now asserted that it was not bound by the statutes and regulations that ordinarily governed such lease transactions. The factual backdrop involved the abundant fisheries of Assam, which are owned by the State and from which the State periodically derives revenue by leasing fishing rights to private licensees. Because these rights were considered highly valuable, the colonial administration in 1886 enacted legislation to prevent unfettered discretion by either the provincial authorities or any single individual in the exploitation of this revenue source. Consequently, Regulation I of 1886, known as the Assam Land and Revenue Regulation, 1886, was enacted, requiring a register of fisheries to be maintained and conferring upon the Deputy Commissioner, with prior sanction of the Chief Commissioner (later the Provincial Government), the authority to declare any water collection as a fishery.

Once a water body was formally declared a fishery, no individual could acquire fishing rights in it except in accordance with rules framed under section 155 of the Regulation. Those rules, which had been amended over time, remained in force at all dates relevant to the dispute. In essence, the operative rules mandated that fishing rights be periodically sold through public auction following a prescribed procedure; such sales were termed “settlements.” The rules imposed several conditions on each settlement: first, the officer conducting the sale was not obligated to accept the highest bid or to accept any bid at all; second, the successful purchaser was required to provide security immediately after his bid was accepted; and third, each annual sale of fisheries within a district had to be reported to the Commissioner for sanction using Form No 100, a document that demonstrated that each individual settlement required separate sanction. Nonetheless, the rules expressly permitted a departure from the ordinary auction process. Rule 190-A stipulated that no fishery could be settled in any manner other than by sale as prescribed in the preceding instructions unless the Provincial Government had previously sanctioned such a departure. Additionally, Rule 191 provided further guidance on the manner in which fisheries should be settled, reinforcing the regulatory framework governing the allocation of fishing rights.

The Court observed that the goal was to obtain the best advantage for fisheries while, subject to that aim, eliminating the role of middlemen as lessees wherever possible. To achieve this, the fishery area was to be divided into blocks of such size that actual fishermen could take the lease, with preference given to occupants of riparian land or to the fishermen themselves. The District Officer was urged to identify sub-lessees and reach agreements with them in order to remove the middlemen entirely. The Rules also provided that any order made by a Deputy Commissioner or Sub-Divisional Officer under these Rules could be appealed to the Revenue Tribunal, which at the time was the High Court. The first respondent had held a lease of the fishery in question for many years, the last of which was due to expire on 31 March 1951. Shortly before that expiry, a series of petitions and memorials were filed by local fishermen seeking, in effect, the operation of Rule 191, although the applications did not expressly cite that rule. Six such applications were filed between 27 October 1950 and 13 March 1951, addressed to various authorities including the Chief Minister, the Revenue Minister, the Secretary to Government, the Parliamentary Secretary and the Deputy Commissioner. Consequently, the Government possessed all relevant facts. In view of these applications, the Government resolved to settle the fishery directly and, on 1 February 1951, wrote to the Deputy Commissioner stating: “Government desires to settle the above-mentioned fishery direct under Rule 190-A. I am therefore directed to request you to put the fishery to auction and then to submit the bid list to Government with your recommendation for direct settlement.” By that date the Government had received four of the six fishermen’s applications, together with a recommendation of the Sub-Deputy Collector dated 4 January 1951 favoring those applications and an endorsement letter from the Deputy Commissioner dated 5 January 1951 confirming the facts in the Sub-Deputy Collector’s endorsement and in the applications. The first respondent also submitted an application to the Parliamentary Secretary on 13 March 1951, before any final decision was made. The Deputy Commissioner proceeded to hold the auction on 24 February 1951 and, on 26 February 1951, forwarded the bid lists to the Government with a recommendation in favor of the first respondent, who had submitted the highest bid, stating: “The present lessee is managing the fishery well and there is nothing against him.” After this submission, but prior to the final sanction, the Government received an additional petition from some local fishermen on 13 March 1951 requesting a settlement in their favor. Thus, by that date the Government held six petitions from the fishermen, one petition from the first respondent, and the various recommendations made by the District officials before deciding the matter.

Having received six petitions – four from local fishermen and one from the first respondent – together with the various recommendations issued by the District officials, the Government held all of this material in its possession. After reviewing the submissions, the Government resolved to favor the first respondent. Consequently, on 17 March 1951 it addressed a letter to the Deputy Commissioner, copying the Development Commissioner, which read as follows: “Government sanction settlement of the Chaiduar-Brahmaputra and Kharoibeel fishery under rule 190-A with the existing lessee Shri Keshab Prosad Singh at an annual revenue of Rs. 17,700 for a term of three years with effect from the 1st April 1951, on the usual terms and conditions.” The Deputy Commissioner transmitted this sanction to the first respondent on 21 March 1951 and required him to make the prescribed deposits. The sanction was set out in the following terms: “You are hereby informed that Government have allowed settlement of Chaiduar-Brahmaputra and Kharoibeel fishery with you at Rs. 17,700 per year for 3 years with effect from 1st April 1951. You are therefore directed to deposit the 1⁄4 purchase money amounting to Rs. 4,425 on 28 March 1951, and the balance of Rs. 13,275 in cash on 31 March 1951, failing which the settlement granted is liable to be cancelled.” Under the generally accepted principles of contract law in civilized jurisdictions, such a communication would constitute a binding agreement from which neither party could withdraw at will; had the first respondent attempted to retreat, it was evident that the State Government of Assam would have rightfully enforced the payment of the stipulated sum.

Nevertheless, the State Government did not regard itself as constrained by the traditional notion of the sanctity of contracts. On the very day it issued the order in favor of the first respondent, namely 17 March 1951, it received two additional petitions emanating from the same fishermen as before. These petitions did not introduce any new facts but requested a reconsideration of the orders that had just been passed. The Government could have recalled its orders immediately, thereby limiting any damage to a mere display of indecisiveness within a limited official circle. Instead, it allowed five days to elapse before the Revenue Secretary instructed the Deputy Commissioner, not to rescind the orders, but to “stay delivery of possession” pending “further orders of Government on the revision petitions.” By that time, however, the acceptance of the bid had already been communicated to the first respondent and, according to ordinary contractual understanding, the contract was complete. The State Government thereafter asserted, in effect, that it was not bound by the statutory rules and thus claimed a right to withdraw its earlier orders and to re-grant the fishery to another person or body deemed more suitable, alleging that it had discovered new virtues hidden from its earlier deliberations. Acting on the telegraphic instructions received, the Deputy Commissioner later conveyed the modified orders, but the earlier acceptance had already created a binding settlement.

On receiving telegraphic instructions, the Deputy Commissioner transmitted the orders to the first respondent on 22 March 1951. In the communication he wrote that the document was being forwarded to Srijut Keshab Prasad Singh for his information and necessary action. He further informed that the first respondent was not to deposit the one-quarter purchase money or provide any additional security until such time as the decision on the revision petition mentioned in the telegram was rendered.

Approximately three weeks later, on 13 April 1951, the State Government formally reviewed its earlier order of 17 March 1951. The Government reported that the Deputy Commissioner had stated that the Gamiri Kharai-Chaiduar Fishermen Society, Ltd. was constituted by bona-fide fishermen. In view of the new circumstances presented by this Society, the Government allowed the review petition and accordingly modified the previous order. The Chaiduar Brahmaputra and Kharaibeel fishery was therefore settled with the Gamiri Kharai-Chaiduar Fishermen Society, Ltd. The manager of the Society was identified as Maniram Das, who had been proposed by 205 members claiming to be bona-fide Assamese fishermen in petitions filed on 27 October 1950 and 21 December 1950, as well as by Mr Das himself on behalf of the Society on 2 January 1951. These claims received endorsement from the Sub-Deputy Collector on 4 January 1951 and from the Deputy Commissioner on 5 January 1951, and were reiterated by Mr Das on 23 January 1951. The Government characterised the “new circumstances” as the Deputy Commissioner’s statement dated 3 April 1951 that the Gamiri Kharai-Chaiduar Society was formed by bona-fide fishermen. Earlier, the Sub-Deputy Collector on 4 January 1951 had recorded that the applicants were Kaibarta people of Darrang district whose sole occupation was fishing, that they were Assamese, and that, having been recommended by respectable persons, the Kharai-Chaiduar fishery should be settled with them to enable them to compete with outsiders. The Deputy Commissioner’s endorsement on 5 January 1951 reiterated that the petitioner, Maniram Das, was an actual fisherman, and noted that indigenous fishermen were unable to compete with up-country fishermen in open auction. Describing the 3 April statement as a discovery of new circumstances, therefore, reflects a cynical disregard for factual accuracy comparable to the Assam Government’s alleged neglect of its own assurances. The Deputy Commissioner was informed of the Government’s revised decision on 13 April 1951, and on 16 April 1951 the fishery was settled with Maniram Das; according to the first respondent, the settlement previously made in his name was subsequently cancelled.

The appellant responded to the settlement by filing an appeal to the High Court under rule 190 and, simultaneously, by seeking a writ of mandamus under article 226 of the Constitution. The relief pleaded read, “The humble appellant, therefore, prays that your Lordships would be pleased to set aside the settlement of the fishery with the respondent and restore the settlement of the same with the humble appellant.” The High Court, on the basis of the facts, granted the prayer. It acted in its capacity as an appellate tribunal under rule 190, and the only remaining question for this Court was whether the High Court possessed jurisdiction to entertain the appeal. The mandamus petition was not before this Court. The appellant in the present proceeding was the State of Assam. The Court noted the long-standing presumption contained in section 114, illustration (h), of the Evidence Act, which dates from at least 1872 and presumes that official acts have been regularly performed. Although it may appear surprising, that presumption applies equally to governments as well as to lesser bodies and officials, and the rule remains in force. The Court cautioned that the presumption must be applied carefully in the present circumstances, but affirmed that it was its duty to endeavour to discover a lawful source for as many of the actions of the State’s government as possible.

Having examined the statutory framework, the Court observed that the prescribed fisheries of Assam had been removed from the sphere of matters that could be dealt with at the discretion of the executive, whether by the Government or by its officials, and had been placed under statutory regulation and control by sections 16 and 155 of the Assam Land and Revenue Regulation of 1886. The elaborate set of rules framed pursuant to that regulation governed all settlements of fisheries. Consequently, no fishery could be “settled” except in conformity with those rules. It was undisputed that, apart from rule 190-A, which the Court was called upon to interpret, the Deputy Commissioner alone possessed the authority to effect a settlement, and that the Deputy Commissioner was bound to follow the prescribed procedure and that his settlement required the sanction of the Commissioner. Rule 190-A allowed a departure from the rules, but the Court found it unnecessary to determine the precise limits of that departure because the Deputy Commissioner had been directed to put the fishery to auction and had complied. The sole deviation from the rules lay in sending the result of the auction directly to the State Government instead of forwarding it to the Commissioner for settlement. The Court considered this deviation permissible and within the scope of the rules. The Court further held that the words “except with the previous sanction of the Provincial Government” were significant and did not empower the Provincial Government to completely remove sales from the statutory protection afforded by the regulation and to dispose of them by executive action.

In this case, the Court observed that allowing rule 190-A to operate against the requirement of section 16 of the Regulation would create a direct conflict, because section 16 mandates that all such sales be carried out in accordance with rules made under section 155, and a rule-making authority does not have power to override the statute. Consequently, the law obliges that every sale be made under and consistent with the applicable rules. The Court further explained that the departure contemplated by rule 190-A must therefore be understood as an exception that still falls within the overall framework of the rules, making it a component of those rules. Although the departure need not follow the “preceding instructions” set out in earlier parts of the rules, once the departure receives sanction it itself becomes integrated into the rules.

The Court stressed that this integration is significant because one of the statutory safeguards against arbitrary executive action is the right of appeal to the Revenue Tribunal, which in the present matter is the High Court. The Court was reluctant to accept that this safeguard could be bypassed simply by removing a sale from the rules whenever the Government found it convenient. The Court noted that if the intention had been to allow the Government to completely step outside the rules and act in an executive capacity, the term “sanction” would be misplaced, since the Government would not need its own prior approval to do something it was already authorized to do. Accordingly, the sanction must refer to approval granted by some other person or body, and in the context of this case it could only mean approval for the Deputy Commissioner to proceed in a manner that does not strictly follow the instructions contained in the rules.

The Court then examined the extent of the sanctioned departure by referring to the letter dated 1 February 1951 addressed to the Deputy Commissioner, which stated: “Government desire to settle the above mentioned fishery direct under rule 190-A. I am therefore directed to request you to put the fishery to auction and then to submit the bid list to Government with your recommendation for direct settlement.” The State of Assam sought to interpret this wording as indicating an intention to disregard the statute and the rules and to act by executive action. Although the phrase “direct settlement” could support that reading, the Court held that such an interpretation would not be justified by law. Assuming, as the Court must, that the official actions of the Assam Government were regularly performed, the Court preferred a construction that does not place the Government in a position of unlawfulness, especially since the Government claimed to be acting under rule 190-A.

Finally, the Court concluded that the only action compatible with both rule 190-A and the letter of 1 February is for the Deputy Commissioner to conduct an auction and then forward the matter to the Government for direct sanction instead of sending it to the Commissioner. This approach, the Court held, constitutes a permissible departure, aligns the Government’s action with rule 190-A, and thereby keeps the entire process within the legal framework.

It was held that the appropriate procedure under rule 190-A required the Deputy Commissioner to conduct an auction and then forward the matter directly to the Government for sanction, rather than to the Commissioner. This method, according to the Court, represented a permissible deviation from the normal channel and would render the Government’s action lawful while keeping the process within the scope of rule 190-A. Consequently, the Court was obliged to interpret the letter in that manner. The Court then examined the conduct of the Deputy Commissioner. With respect to the actual auction, the Deputy Commissioner complied fully with the applicable Rules. He organised a regular auction, recorded the bids in the customary fashion, and thereby satisfied both the stipulations of the 1 February order and the ordinary procedural requirements. The sole departure from the standard procedure lay in the Deputy Commissioner’s decision to send his chosen lessee directly to the Government for approval instead of forwarding the recommendation to the Commissioner. The Court considered this to be a permissible departure. Upon receiving the Deputy Commissioner’s recommendation, the Government granted sanction for the settlement with the first respondent, and the Deputy Commissioner communicated that sanction. The State of Assam contended that the settlement was effected by the Government itself, with the Deputy Commissioner merely acting as an emissary conveying the Government’s orders to the first respondent. The Court dismissed this argument as a mere linguistic maneuver, observing that the substantive act remained the same. Because the statute prohibited the Government from effecting a direct settlement through executive action, the appropriate course was for the Government to sanction the settlement under rule 190-A, which it indeed did. The Government asserted that it acted under rule 190-A and that it had “sanctioned” the settlement. The Court noted that sanction could only be given to the act of another, and the only other actor in the matter was the Deputy Commissioner. Accordingly, despite the Government’s attempts to portray itself as acting independently of any legal constraints, the Court concluded that the Government had, in fact, operated within the legal framework and that the settlement was the act of the Deputy Commissioner, thereby falling squarely within the provisions of the Rules. This gave the first respondent a valid and legal lease title. Subsequently, a comparable sequence of actions cancelled the original settlement with the first respondent and established a new settlement with a rival party. Since the Deputy Commissioner alone possessed the authority to settle such fisheries, subject to required sanction, the Court held that both the cancellation and the new settlement were acts of the Deputy Commissioner, even though they were carried out under the direction and orders of a third party. This reasoning consequently conferred jurisdiction upon the High Court to entertain the appeal concerning those actions.

The Court observed that when it stated that the Deputy Commissioner acted under the direction and orders of the State Government, the reference was to the actual act of “settling” the fishery and not to the Deputy Commissioner’s selection of a lessee. The Court explained that, in a normal auction, the Deputy Commissioner would first conduct the auction, then choose a successful bidder, and subsequently forward that choice to a higher authority – the Commissioner – for approval. After receiving the Commissioner’s sanction, the Deputy Commissioner would then proceed to “settle” the fishery. In the present case, the Court noted that the Deputy Commissioner performed each of those steps, but the higher authority was the State Government, which had, under rule 190-A, replaced the Commissioner. The Court emphasized that the Deputy Commissioner made the initial choice of the bidder, that choice was “sanctioned” by the State Government, and that the Deputy Commissioner himself, in fact, “settled” the fishery with the first respondent. The Court held that the State Government’s additional instruction to the Deputy Commissioner to “settle” the fishery did not diminish or remove the legal authority vested in the Deputy Commissioner. It further clarified that this was not a situation where the Deputy Commissioner, having been given discretion, failed to exercise it and merely acted as a mouthpiece for another authority. The Court pointed out that the Deputy Commissioner’s discretion was limited to selecting a bidder, a decision he made without external pressure. Once his selection was sanctioned, his authority extended to “settling” the fishery with that bidder, and the direction from the State Government could not invalidate the legal and binding character of that settlement.

On the merits, the Court agreed with the High Court’s finding and described it as “abundantly right.” Accordingly, the Court affirmed the High Court’s order, dismissed the appeal, and directed that costs be paid to the first respondent. The matter concerned Civil Appeal No. 176-A of 1952. The judgment was delivered by Justice Bose, who, for the reasons set out in the earlier judgment in Civil Appeal No. 176 of 1952, dismissed the appeal without costs. Both appeals were therefore dismissed. The record noted that the appellant in Appeal No. 176 was represented by an agent, while the first respondent in both Appeal No. 176 and Appeal No. 176-A was represented by an agent, and the second respondent in Appeal No. 176 and the appellant in Appeal No. 176-A were also represented by an agent, identified respectively as Naunit Lal, A. D. Mathur, and K. R. Krishnaswamy.