Ananda Behera and Another v. State of Orissa and Another

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

Court: supreme-court

Case Number: Petition No. 286 of 1955

Decision Date: 27 October 1955

Coram: Vivian Bose, B. Jagannadhadas, Syed Jaffer Imam

In the matter titled Ananda Behera and Another versus the State of Orissa and Another, the Supreme Court rendered its judgment on the twenty-seventh day of October in the year nineteen-fifty-five. The opinion was authored by Justice Vivian Bose, and the bench comprised Justices Vivian Bose, B. Jagannadhadas, and Syed Jaffer Imam. The parties were identified as the petitioners, Ananda Behera and another individual, and the respondents, the State of Orissa together with an additional respondent. The decision was recorded in the official reports as citation 1956 AIR 17 and also in the Supreme Court Reports, volume two, page 919. The issues presented concerned the enforcement of fundamental rights under Articles nineteen point one sub-clause f and thirty-one of the Constitution of India, the applicability of the Orissa Estates Abolition Act of nineteen-fifty-one, and the relevance of Section fifty-four of the Transfer of Property Act of eighteen-eighty-two. The principal question addressed whether an oral sale of fishery rights for years that lay beyond the date on which the estate was vested in the State created a property right capable of protection under the Constitution, and whether such a transaction fell within the scope of the Transfer of Property Act or was excluded as a sale of future goods.

The Court observed that the petitioners had obtained oral licences from the proprietor of the estate, the Raja of Parikud, allowing them to catch and appropriate fish from specified sections of Chilka Lake. These licences were granted on payment of substantial sums and were evidenced by receipts consistent with the customary practice of the time. The licences were issued before the enactment of the Orissa Estates Abolition Act of nineteen-fifty-one, which transferred ownership of the estate to the State of Orissa. However, the licences related to future fishing seasons occurring after the statutory vesting of the estate in the State. The State of Orissa declined to recognise the licences and sought to retract the petitioners’ claimed fishery rights. The petitioners argued that this refusal infringed their fundamental rights under Articles nineteen-one-f and thirty-one-one, asserting that the transactions involved the sale of future goods—namely, fish—and therefore fell outside the ambit of the Transfer of Property Act, which dealt solely with immovable property. The Court held that the right acquired by the petitioners was not a future-goods transaction but rather a licence to enter the land together with a profit à prendre, that is, a right to take fish from the land. Such a profit à prendre constituted immovable property within the meaning of the Transfer of Property Act read with Section three-twenty-five of the General Clauses Act, thereby invoking the requirements of Section fifty-four. Because the sale of the profit à prendre exceeded one hundred rupees and was effected without a written instrument or registration, it contravened Section fifty-four of the Transfer of Property Act, and consequently no title or interest passed to the petitioners. The Court therefore concluded that the petitioners possessed no enforceable fundamental right in respect of the licences. The earlier decision in Firm Chhotabhai Jethabai Patel and Co. versus the State of Madhya Pradesh, reported in [1953] S.C.R. 476, was distinguished and held inapplicable. The Court further noted that it was unnecessary to decide whether the contract fell within the definition of property protected by Articles nineteen-one-f and thirty-one-one; even assuming it did, the lack of compliance with statutory formalities precluded any protective right.

In the matter before the Court, it was observed that the State had not removed the property in question from the petitioners nor had it prevented them from acquiring, holding, or disposing of that property. The State’s position was merely that it refused to recognize the contract alleged by the petitioners and declined to consider itself bound by its terms. While such refusal might give rise to a cause of action for a contractual suit, the Court held that no fundamental right was engaged because the State had not confiscated, acquired, taken possession of, or derived any benefit from the contract. The case was filed as an original jurisdiction petition, numbered 286 of 1955, invoking Article 32 of the Constitution for the enforcement of fundamental rights. Counsel for the petitioners were H Mahapatra and G C Mathur, while the respondent was represented by the Solicitor-General of India, C K Daphtary, assisted by counsel Porus A Mehta and P G Gokhale. The judgment was delivered on 27 October 1955 by Justice Bose, and the decision was declared to be the governing judgment for petitions 287, 288, 289 and 304 of 1955. The Court then set out the factual background of petition 286, noting that the remaining petitions followed the same pattern. The dispute concerned the fishery rights in Chilka Lake, which had formerly formed part of the estate of the Raja of Parikud. That estate had vested in the State of Orissa under the Orissa Estates Abolition Act 1951 (Orissa Act I of 1952) by the notification dated 24 September 1953, and the estate had thereafter ceased to exist in its original form. The Act itself had come into force on 9 February 1952. The petitioners stated that they were engaged in the business of catching and selling fish from the fisheries within the lake. They further recited that long before the vesting of the estate they had entered into contracts with the former proprietor, paying substantial sums to obtain licences that authorized them to catch and appropriate all fish from the specific fisheries listed in a schedule annexed to the petition, and that they had obtained receipts for those payments in accordance with the prevailing practice. The lake was divided into sections, and the present petition concerned four of those sections. The licences for the four sections were purchased on the following dates: 30 July 1950 for rights in Gerasar Prawn for the season 1955-56; 2 August 1950 for rights in Jayamal Prawn for 1955-56; 18 September 1951 for rights in Solakudi Prawn for 1955-56; and 6 May 1952 for rights in Jayamal Chungudi for the seasons 1956-57, 1957-58, and 1958-59. Although these licences were acquired before the estate vested in the State of Orissa, they pertained to future fishing years, all of which fell after the date of vesting. The State of Orissa refused to recognise these licences and was prepared to re-auction the rights when the petitioners filed the present petition, seeking writs under Article 32 on the ground that their fundamental rights under Articles 19(1)(f) and 31(1) were, or were about to be, infringed. The Court identified the principal issue as whether the petitioners, by their several purchases, had acquired any rights or interests in “property,” since the enforcement of Articles 19(1)(f) and 31(1) depended upon such an acquisition.

In the petition the respondents contended that the transactions involved the sale of future goods, specifically the fish that would be caught in particular sections of the lake, and they argued that because fish are movable property the Orissa Act I of 1952 should not apply, as that statute is limited to immovable property. The Court agreed with the Solicitor-General that if the respondents’ claim were based solely on that premise, their petition under article 32 would be misguided, since until any fish were actually harvested the petitioners would not own any property in them. The Court observed unequivocally that the lake itself is immovable property and formed part of the Raja’s estate; consequently it vested in the State of Orissa when the notification under the Act was issued, and with that vesting the State acquired the same rights that any landowner possesses, namely the power to exclude persons from the land and to regulate, control and sell the fisheries located there. The Court noted that if the petitioners’ entitlement were merely the right to obtain future goods under the Sale of Goods Act, that would constitute a purely personal contractual right arising from an agreement to which the State of Orissa was not a party, and that a refusal to perform such a contract could amount to a breach of contract but could not be characterised as a violation of any fundamental right. However, the Court declined to adopt that narrow construction for the present case. The factual disclosures in paragraph 3 of the petition made clear that what had been transferred was the right to catch and remove fish from specified sections of the lake for a designated future period. The Court explained that such a transfer amounts to a licence to enter the land together with a grant to catch and carry away the fish, which is known as a profit à prendre, as discussed in Halsbury’s Laws of England (Hailsham Edition), pages 382-383. In English law this is treated as an interest in land (Halsbury’s Laws of England, page 387) because it confers a right to draw profit from the soil for the benefit of the holder of the right. Indian jurisprudence likewise regards a profit à prendre as a benefit that arises out of the land and therefore as immovable property. Section 3(26) of the General Clauses Act defines “immovable property” to include such benefits. The Transfer of Property Act does not expressly define the term, except to state that immovable property does not include standing timber, growing crops or grass; fish do not fall within those excluded categories, so the definition in the General Clauses Act applies. Because a profit à prendre is considered a benefit arising out of land, it follows that it constitutes immovable property within the meaning of the Transfer of Property Act. The Court then began to consider the definition of a “sale” as a transfer of ownership in…

In this case the Court explained that a sale means an exchange for a price that is either paid or promised. Because a profit à prendre is classified as immovable property and, in the present circumstances, it was acquired for a price that was actually paid, the transfer had to comply with the requirements of writing and registration imposed by section 54 of the Transfer of Property Act. The Court observed that if a profit à prendre is treated as tangible immovable property, then the “property” in question had a value exceeding one hundred rupees. Conversely, if it is regarded as intangible, the law still mandates a registered instrument irrespective of the amount involved. The transactions under scrutiny were oral sales; there was no written document and no registration took place. Consequently, the Court held that those transactions did not create any valid title or interest, and therefore the petitioners possessed no fundamental right that could be enforced. The Court then referred to the decision in Firm Chhotabhai Jethabai Patel & Co. v. State of Madhya Pradesh (1963) S.C.R. 476, noting that the earlier case held that a right to “pluck, collect and carry away” tendu leaves did not confer any proprietary interest in the land and consequently was not an “encumbrance” within the meaning of the Madhya Pradesh Abolition of Proprietary Rights Act. However, the Court distinguished that case because the contract there concerned the removal of leaves that grow on trees, which constitute a growing crop. A growing crop is expressly excluded from the definition of immovable property under the Transfer of Property Act, making the earlier decision inapplicable to the present facts. The Court also considered an argument that a contract might constitute “property” under Articles 19(1)(f) and 31(1) of the Constitution. It declined to decide that issue, because even assuming the contract were property, the State of Orissa had neither taken away the petitioners’ contract nor prevented them from acquiring, holding or disposing of it. The petitioners remained free to sue on the contract or to assign it if they wished. The State’s position, the Court noted, was merely that it was not a party to the contract and that neither the rights nor the liabilities under the contract had devolved upon it; consequently the State refused to recognise or assume any obligations of either contracting party. The Court observed that if the State’s stance were erroneous, the petitioners might have a cause of action for damages for breach of contract or, perhaps, a claim for specific performance, but no question under Articles 19(1)(f) and 31(1) arose because the State had not confiscated, acquired or taken possession of the contract. Had the State done so, it would have claimed the benefits flowing from the contract, such as taking the money that the petitioners had paid to the Raja from the Raja or demanding the amount again from the petitioners, but the State had not taken any such steps.

In this matter, the Court observed that the State took the clear position of refusing to acknowledge that any contract existed between the parties. By stating that the contract was not recognised, the State effectively denied the very existence of the agreement that the petitioners claimed gave them a legal right. Because the alleged contract was not accepted as a factual reality, the petitioners were unable to demonstrate a cause of action that could be pursued in this Court. The Court therefore concluded that the petition did not disclose any maintainable claim and could not be allowed to proceed. On that basis, the Court ordered that the petition be dismissed. In addition, the Court directed that the petitioners be ordered to pay the costs of the proceeding, thereby concluding the case with a dismissal and a costs order.