State of Bombay vs Mulji Jetha and Co.

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 10 February 1955

Coram: Jagannadhadas, J.

In this case the Supreme Court recorded that the matter before it comprised two appeals filed on 10 February 1955 by the State of Bombay against the judgment of the High Court of Bombay, which had been granted leave under Article 133(1)(c) of the Constitution in the common decree of Second Appeals Nos. 936 and 937 of 1947. The State of Bombay was the appellant and Mulji Jetha & Company was the respondent. The respondent owned three survey numbers at Jalgaon in the State of Bombay, namely Survey Nos. 253-A, 254-A and 253-B, which had been used and assessed as agricultural lands before the year 1911. In 1911 the respondent applied under Section 35 of the Bombay Land Revenue Code, 1879 to the Collector of Jalgaon for permission to divert the lands comprising Survey Nos. 253-A and 254-A from agricultural to non-agricultural use so that a structure could be erected in accordance with a plan that was filed with the application. In 1912 a further similar application was made with respect to Survey No. 253-B. After referring the plans to the Municipality and obtaining its views, the Collector granted the required permission on 1 August 1911 for Survey Nos. 253-A and 254-A and on 1 August 1912 for Survey No. 253-B, allowing diversion of the lands to non-agricultural use in accordance with the approved plans. The assessment of the three survey numbers was subsequently altered under Section 48 of the Code and Rule 56(2) made by the Government under Section 214 of the Code, raising the rate from Rs. 1-9-0 per acre to Rs. 20 per acre. On 24 July 1914 the Collector issued three sanads (Exs. 38, 39 and 40) in favour of the respondent, each specifying the enhanced assessment for the respective survey number for a term of fifty years commencing from the date of the permission. Pursuing the granted permission and the approved plans, the respondent erected buildings on the three survey numbers and paid the revised assessments. Subsequently Survey Nos. 253-A and 254-A were consolidated into City Survey No. 2113 and Survey No. 253-B was redesignated as City Survey No. 2114. In 1941 the respondent expressed a desire to construct two additional bungalows on City Survey No. 2113 and also wished to dismantle the structures standing on City Survey No. 2114 and to sell that land in convenient plots for building purposes in accordance with the Municipal Building bye-laws. To that end he sent two letters to the Collector dated 7 November 1941, one for each survey number, indicating his intention and adding the remark, “We presume that you have no objection to this.” The Collector replied by a single letter dated 11 February 1942, informing the respondent that the original order granting permission had stipulated that the bungalows must be built in accordance with the approved plan and that any alteration or addition to that plan required the Collector’s further permission. Following this reply the respondent instituted two suits against the Province of Bombay seeking a declaration of his right and an injunction, after serving the requisite notices under Section 80 of the Civil Procedure Code. Appeal No. 9 arose from the suit concerning City Survey No. 2114, in which the plaintiff sought a declaration that he was at full liberty and had full right to demolish the buildings, bungalows, out-houses, garage, privies and other structures standing on the property.

The Collector responded to both of the plaintiff’s letters with a single letter dated 11-2-1942 (Exhibit P-34). In that letter the Collector wrote: “We presume that you have no objection to this.” He then stated, “With reference to your two applications of 7-11-1941, on the subject noted above, I am to inform you that since the original order about the grant of permission laid down the condition that bungalows shall be built in accordance with the plan produced, Collector’s permission is necessary to make any alteration or addition in the plan then already approved.” After receiving this reply, the plaintiff instituted two separate suits against the Province of Bombay, each seeking a declaration of his right and an injunction, and he complied with the procedural requirement of serving notices under Section 80 of the Civil Procedure Code. The first suit, identified as Appeal No 9, concerned Survey No 2114 and prayed for a declaration that the plaintiff was at full liberty to demolish the existing buildings, bungalows, out-houses, garage, privies and any other structures on the contested property, to subdivide the land into plots, to sell those plots for building purposes in accordance with the Municipal Bye-laws, and that neither the defendant nor the defendant’s officers were entitled to act in a manner prejudicial to those rights. The second suit, identified as Appeal No 10, related to Survey No 2113 and asked for a declaration that the plaintiff was entitled to construct buildings on the land in suit and to make additions and alterations in compliance with the municipal bye-laws, and that neither the defendant nor any of the defendant’s officers possessed any authority in that matter.

The trial court rejected the plaintiff’s contentions and dismissed both suits; that decision was upheld on appeal by the District Judge of East Khandesh at Jalgaon. On second appeal, however, the learned judges of the Bombay High Court reversed the lower courts’ rulings and granted the declarations sought by the plaintiff in each suit. The plaintiff-respondent argued that the permission originally granted in 1911-1912 to divert the lands from agricultural use to building purposes, together with the enhanced assessment covering the whole area of the surveyed numbers, precluded the Collector from demanding further permission for any additional alterations, additions, or for parceling out the land as building sites for sale. He further contended that because the lands lay within the jurisdiction of Jalgaon Municipality, his obligations were limited to compliance with the Municipal bye-laws relating to building construction, and that the Collector possessed no authority over such matters. The State’s principal defence, set out in paragraph 4 of its written statement, asserted that the plaintiff occupied the suit land as a tenant, that the land had previously been used and assessed as agricultural, and that the permission granted under sections 65 and 67 of the relevant act was expressly limited to erecting buildings only on the sites specified in the plan submitted by the plaintiff, requiring the plaintiff to maintain the remainder of the land in an open condition, a condition that the plaintiff had accepted and which formed a lawful term annexed to his tenure of the land.

The State’s statement explained that the land in question had previously been used and assessed as agricultural land. In the years 1911 and 1912 the Collector, exercising authority under Sections 65 and 67, granted the plaintiff permission to erect buildings on the land, but only in accordance with a plan that the plaintiff had submitted. The State denied that this permission gave the plaintiff the right to build on any part of the suit land at his own discretion. According to the State, the plaintiff was lawfully entitled to construct buildings solely on the sites that were specifically identified in the approved plan, and he was required to follow the plan exactly and to keep the remainder of the land undeveloped and open. By accepting those conditions, the plaintiff incorporated them as terms lawfully attached to his tenure of the land.

The trial court and the first appellate court both accepted the State’s contention. They held that, although the revised revenue assessment covered the whole area described by the relevant survey numbers and the permission to change the land from agricultural to building purposes also referred to the entire area, the permission was nevertheless limited by the condition imposed. The courts found that this condition could be inferred from the correspondence filed as Exhibits 41 to 45, which showed that the plaintiff had agreed to build strictly according to the specified plans and that the permission was granted on that basis.

In contrast, the learned judges of the High Court adopted a different approach. They ruled that the three “sanads” issued by the Collector to the plaintiff constituted the sole contract between the Government and the registered occupant, and therefore represented the entire agreement. Consequently, the High Court held that the earlier correspondence was inadmissible. Because the “sanads” did not contain any express conditional permission, the High Court concluded that the Collector could not require the plaintiff to obtain further permission for the alterations he was proposing with respect to the survey numbers that formed the subject matter of the two suits.

The correctness of the High Court’s view was later challenged before this Court by the learned Attorney-General. Extensive arguments were presented concerning the overall scheme of the Code and the specific provisions contained in Chapters V and VI, with particular reference to Sections 45, 48, 65 to 68, and 73. The Court was supplied with a copy of Rule 56(2), which governed the issuance of the “sanads” and prescribed their form. The contents of the actual “sanads” issued in these cases were examined, together with the findings of both the first appellate court and the High Court regarding the substance of the correspondence set out in Exhibits 41 to 43. A strong argument was advanced that the High Court’s interpretation was erroneous, although the Court noted that it was unnecessary to pursue that argument further because the appeals could be disposed of on a much shorter ground.

In order to resolve the argument that had been raised, the Court observed that the appeals could be disposed of on a very short ground. For this purpose it was sufficient to examine sections 48, 65 and 67 of the Code as they existed before their amendment in 1913, because the permission in question had been granted in 1911 and 1912, that is, before the amendment. The Court set out the relevant wording of those three sections as they stood prior to 1913. Section 48 provided that land revenue under the Act was chargeable on land appropriated for agricultural purposes, on land appropriated for any purpose from which a profit or advantage other than that normally obtained by agriculture was derived, and on land appropriated for building sites. Section 65 stated that an occupant of land appropriated for agricultural purposes, together with his servants, tenants, agents or other legal representatives, was entitled to erect farm buildings, construct wells or tanks, or make any other improvements for better cultivation or more convenient occupation of the land. If an occupant wished to appropriate his holding, or any part of it, for any other purpose, the registered occupant first had to apply to the Collector for permission. Upon receipt of such an application the Collector, after due inquiry, could either grant or refuse the permission. When land was thus appropriated for a purpose unrelated to agriculture, the Collector, subject to the general orders of the Government, could lawfully require the payment of a fine in addition to any new assessment that might be levied under section 48. Section 67 clarified that nothing in the preceding two sections prevented the granting of permission in special cases on terms or conditions that might be agreed between the Government and the registered occupant. The Court then noted that there was no dispute that the Collector had, in 1911 and 1912, granted permission to convert the suit lands from agricultural to non-agricultural use for building purposes, and that this permission covered the entire area described by the suit survey numbers. The State’s claim was that the permission was limited by a condition that the buildings to be erected had to conform to the plans then approved and that any alteration required further permission from the Collector or a mutual agreement. The basis for this claim was section 37 of the Code as it then stood, which said that nothing in section 65 prevented the granting of permission in special cases on such terms or conditions as might be agreed between the Government and the registered occupant. Consequently, the Court recognized that a permission granted under section 35 could be subject to conditions, but that the imposition of such conditions had to be made only in special cases and only as the result of an agreement between the Government and the registered occupant.

In the statute, conditions may be imposed only in special cases and such conditions must arise from an agreement between the Government and the registered occupant. In the present matter the written statement, specifically paragraph four, alleged an agreement only between the Collector and the registered occupant, and the correspondence identified as exhibits forty-one to forty-three likewise refers, if anything, to an arrangement between the Collector and the registered occupant. No pleading or evidence was offered to show that an agreement existed between the registered occupant and the Government, and nothing was shown to indicate that applications of this sort had to be treated as special cases. It is clear that the Collector is not the same entity as the Government, and no rule was produced that would empower the Collector to act on the Government’s behalf under Section thirty-seven. Section eight of the Code confirms this distinction by stating that the Government appoints in each district an officer designated as the Collector, who may exercise all powers and discharge all duties imposed on a Collector by the Act. The Attorney-General was unable to dispute this interpretation. Consequently, the State failed to establish that any lawful condition was attached to the Collector’s permission to divert the lands from agricultural to building use. Because of this failure, there is no justification for overturning the declarations made in favor of the plaintiff-respondent by the High Court. It appears that the trial court may have overlooked the wording of Section thirty-seven as it existed before 1913, and that the State’s defence relied on the present wording of Section thirty-seven, which provides: “Nothing in the last two preceding sections shall prevent the granting of the permission aforesaid on such terms or conditions as may be prescribed by the Collector, subject to any rules made in this behalf by the Government.” While the written statement’s plea in paragraph four correctly recognized that the condition should be an agreement, it failed to appreciate that the agreement must be between the Government and the registered occupant, not between the Collector and the registered occupant. In the result, both appeals were dismissed with costs, but only a single hearing fee was required for the two appeals together.