Rangildas Varajdas Khandwala vs Collector of Surat and Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 6 of 1959

Decision Date: 3 October 1960

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, J.L. Kapur, P.B. Gajendragadkar, P.B. Subbarao

In the matter of Rangildas Varajdas Khandwala versus the Collector of Surat and others, the Supreme Court rendered its judgment on the third day of October, 1960. The decision was delivered by a bench comprising Justice K. N. Wanchoo, Justice Bhuvneshwar P. Sinha, Justice J. L. Kapur and Justice P. B. Gajendragadkar. The case is reported in the 1961 All India Reporter at page 291 and in the 1961 Supreme Court Reporter (first series) at page 951. The citation also references the 1983 Supreme Court Reports, volume 762, and it involves the Bombay Inams – Abolition of Personal Inams – Constitutional validity of enactment, relating to land that had been used for a non‑agricultural purpose and the levy of a full assessment by the Collector, as governed by sections 45, 48, 52 and 117‑R of the Bombay Land Revenue Code, 1879, and sections 4, 5 and 7 of the Bombay Personal Inams Abolition Act, 1952, together with the provisions of Articles 31‑A and 294(b) of the Constitution of India.

The appellant, Rangildas Varajdas Khandwala, was the holder of a personal inam that he had purchased from the original inamdar. The original inamdar had been issued a Sanad under Bombay Act Number VII of 1863. The appellant paid a regular salami of seven rupees and a quit‑rent of six rupees three annas zero paise, while the total assessment of the land amounted to fifty‑six rupees eight annas zero paise. The land forming part of the inam was initially situated in a village, but over time it became incorporated into the expanding suburbs of Surat. The land was thereafter employed for a non‑agricultural purpose, and a substantial bungalow had been constructed upon it. On that basis, the Collector of Surat issued an order that the land should be assessed as non‑agricultural under section 52 of the Bombay Land Revenue Code, 1879, with effect from the first day of August, 1955, invoking proviso (b) to section 4 of the Bombay Personal Inams Abolition Act, 1952. The appellant challenged the constitutional validity of the 1952 Act, arguing that the Act was not protected by Article 31‑A because the property dealt with was not an estate and the Act provided no compensation for the deprivation of his property. He further contended that, having been granted a Sanad when his inam was recognized, the State of Bombay could not enact legislation that would in any manner alter the terms of that Sanad. Additionally, the appellant asserted that the Collector’s order was erroneous because section 7 of the Act created an exception to sections 4 and 5 for lands of inamdars used for building or other non‑agricultural purposes, and therefore his land, being used entirely for such a purpose, could not be assessed under section 5 of the Act. He also maintained that section 52 of the Code conferred power on the Collector only where no assessment had been fixed under Chapter VIII‑A, and that in this case the assessment had already been fixed under the provisions of Chapter VIII‑A, rendering section 52 inapplicable.

The Court observed that the provision exempting a piece of land from the payment of land revenue could not be invoked in the present matter because the assessment of the land had been fixed under the provisions of Chapter VIII‑A of the Bombay Land Revenue Code. Section 52 of that Code was capable of application only where no assessment had been fixed under Chapter VIII‑A, and therefore the exemption provision was inapplicable. In its holding the Court made three specific points. First, it declared the Bombay Personal Inams Abolition Act, 1952, to be a valid piece of legislation that enjoyed protection under Article 31‑A of the Constitution of India, following the precedents set in Gangadharrao Narayanrao Majumdar v. State of Bombay, Thakur Jagannath Baksh Singh v. United Provinces and Maharaj Umeg Singh v. State of Bombay. Second, the Court explained that the exception contained in Section 7 of the Act saved only those inam lands which were used by the inamdar for building or other non‑agricultural purposes from vesting in the Government; nevertheless, such lands continued to be subject to the provisions of Sections 4 and 5 of the Act. Third, the Court clarified that the reference in Section 52 of the Bombay Land Revenue Code, 1879, to the non‑application of the section where an assessment had been fixed under Chapter VIII‑A, meant an actual assessment made under that chapter and not a deemed assessment under the chapter by virtue of Section 117‑R. Since the land in the present case was not wholly exempt from revenue and, in fact, no assessment had been fixed on it under Chapter VIII‑A, Section 52 was applicable and the Collector possessed the authority to make an assessment in accordance with that provision.

The judgment was delivered in a civil appellate jurisdiction concerning Civil Appeal No. 6 of 1959, which had been taken by special leave from the judgment and order dated 5 March 1957 of the Bombay High Court in Special Civil Application No. 3255 of 1956. Counsel for the appellant and the respondents were appointed, and the judgment was pronounced on 3 October 1960 by Justice Wanchoo. The appeal raised constitutional and interpretative questions relating to certain provisions of the Bombay Personal Inams Abolition Act No. XLII of 1953, referred to as “the Act”. The factual background relevant to the appeal was that the appellant held a personal inam which he had purchased from the original inamdar, to whom a Sanad had been issued under Bombay Act No. VII of 1863. The land forming part of the inam was originally situated in the village of Athwa but had become part of the suburbs of Surat. The appellant paid a salami of Rs 7 and a quit‑rent of Rs 6‑3‑0, making the total assessment of the land Rs 56‑8‑0. In November 1952 the City Survey Officer of Surat sought to levy a non‑agricultural assessment on this land under Section 134 of the Bombay Land Revenue Code, 1879, because the land was being used for non‑agricultural purposes and a large bungalow had been constructed on it.

After a large bungalow had been erected on the land, the appellant objected to the City Survey Officer’s attempt to levy a non‑agricultural assessment. In September 1954 the Collector informed the appellant that, contrary to an assessment under section 134 of the Bombay Land Revenue Code, the land would be liable to a non‑agricultural assessment effective from 1 August 1955, relying on proviso (b) to section 4 of the Bombay Personal Inams Abolition Act. The appellant again lodged an objection. On 28 July 1955 the Collector issued a decision that the land should be subject to full non‑agricultural assessment from 1 August 1955 under section 52 of the Code. The appellant appealed this decision to the Bombay Revenue Tribunal, but the Tribunal dismissed the appeal. Subsequently, the appellant filed a writ petition in the High Court contesting both the Tribunal’s order and the constitutionality of the Act. The High Court rejected the petition, relying on an earlier decision of that Court for the constitutional challenge and holding that the Collector’s order to levy non‑agricultural assessment from 1 August 1955 was proper. The appellant then sought a certificate to appeal to this Court, which was denied, and later filed a special leave petition that was granted, bringing the present matter before this Court.

The Court noted that the issue of the Act’s constitutionality had already been considered in Gangadharrao Narayanrao Majumdar v. State of Bombay (1), where the Act was upheld. The appellant raised a new argument that, based on article 294(b) of the Constitution and the fact that a Sanad had been issued when the inam was recognised, the State of Bombay could not enact legislation that altered the terms of the Sanad. The Court observed that this argument, which rests on the alleged immutability of Sanads, had been rejected by the Federal Court in Thakur Jagannath Baksh Singh v. The United Provinces (1) and also by this Court in Maharaj Umeg Singh and others v. The State of Bombay and others (2). Accordingly, the Court dismissed the argument for the same reasons given in those cases, and the constitutional challenge to the Act failed. Turning to the appellant’s contention that the Collector’s order to assess the land under section 52 of the Code as non‑agricultural was incorrect, the Court found no merit in that claim. Under section 4 of the Act, all personal inams were extinguished, and, except as expressly provided by the Act, all rights subsisting as of that date in respect of such personal inams were also extinguished. Consequently, the appellant could not claim any protection from assessment after the Act came into force.

According to the judgment, once the Act had become operative, Section 5 expressly stipulated that every inam land was required to pay land‑revenue in accordance with the provisions of the Code, and therefore such lands had to be fully assessed as prescribed by the Code. The appellant, however, invoked Section 7 of the Act and argued that this provision created an exception to Sections 4 and 5 for lands owned by inamdars that were being used for building or other non‑agricultural purposes. On that basis, the appellant contended that his inam land, which was wholly employed for non‑agricultural use, namely construction, could not be subject to the full assessment mandated by Section 5.

The Court examined the language of Section 7 and found no basis for treating it as an exception that would override Sections 4 and 5. The Court reiterated that Section 4 abolished personal inams and extinguished the rights of inamdars in respect of such inams, while Section 5 made it clear that all inam villages and inam lands were to fall within the regime of full land‑revenue assessment as laid down by the Code. Section 7, the Court observed, dealt specifically with the vesting of certain portions of inam lands in the State, such as public roads, lanes, paths, unbuilt village sites, waste lands and uncultivated lands. An exception was carved out in Section 7 only with respect to the vesting of lands that the inamdar used for building or other non‑agricultural purposes.

The appellant relied on that exception and argued that it removed the lands so excepted from the operation of Sections 4 and 5. The Court held this interpretation to be incorrect. The Court explained that Section 7 merely prevented the vesting of those particular lands in the Government; it did not remove them from the operation of the earlier provisions. Consequently, the lands that were exempted from vesting remained what they had been prior to the Act and therefore continued to be governed by Sections 4 and 5. Because those sections still applied, the appellant could not claim that the exception in Section 7 exempted his lands from the assessment requirements of Sections 4 and 5. The Court therefore concluded that the argument based on Section 7 must fail.

The appellant’s next contention was that the Collector lacked authority to assess the land as non‑agricultural under Section 52 read with Sections 45 and 48 of the Code. Section 45 provides that every parcel of land, unless specifically exempted, is liable to pay land‑revenue. Section 48 further provides that the levy of land‑revenue on any land must be assessed according to the land’s use, distinguishing between agricultural use, building use, and any other purpose. The Court noted these statutory provisions and prepared to consider their application in the context of the appellant’s land, which was not being used for agriculture but for building purposes.

(c) for any purpose other than agriculture or building. The Court read Sections 45 and 48 together and observed that the assessment of land revenue depended on the purpose for which the land was being used, and that such assessment had to be made in accordance with the rules framed under the Code. In the case before the Court there was no dispute that the appellant’s land was not being cultivated and that it was being used for a non‑agricultural purpose, namely the erection of buildings. Consequently, because the land now had to be brought within the full assessment regime prescribed by Section 5 of the Act, the only permissible assessment was that of a non‑agricultural land. For that purpose it was irrelevant when the non‑agricultural use had commenced. The land had previously been classified as a personal inam land and, until the Act came into force, it had been governed by the law relating to personal inams. The Court noted that the personal inams and all rights attaching to them were abolished by the Act, and that the land therefore required its first full assessment under Section 5 of the Act read with the provisions of the Code. The assessment, therefore, had to be made on the basis of the current use, which was non‑agricultural. Section 48 required the assessing officer, at the time of assessment, to consider the present use of the land and to assess it accordingly. Because the assessment was to be made after the enactment of the Act, the Court held that it necessarily had to be on a non‑agricultural basis, reflecting the land’s actual use at the time of assessment. The appellant further contended that Section 52, which empowers the Collector to make assessments of lands that are not wholly exempt from land‑revenue, did not apply because the assessment in this case had already been fixed under Chapter VIII‑A of the Code, and Section 52 was applicable only where no assessment had been fixed under that Chapter. Reference was also made to Section 117‑R of Chapter VIII‑A, a provision introduced in 1939 that deals with assessment and settlement of land‑revenue on agricultural lands. Section 117‑R was described as a deeming provision, stipulating that all settlements of land‑revenue that had been made and were in force before the commencement of the Bombay Land Revenue Code (Amendment) Act, 1939, were to be deemed to have been made in accordance with the provisions of Chapter VIII‑A and, notwithstanding Section 117‑E, were to continue until a revision settlement was introduced. The appellant argued that, because of this deeming clause, the settlement on which the land was held as an inam should be treated as having been made under Chapter VIII‑A, and therefore Section 52 could not be invoked.

The Court observed that the land in question had been held as inam land, which meant it was deemed to have been created under Chapter VIII‑A. Therefore the Court said it could not be correctly asserted that no assessment had been fixed under the provisions of Chapter VIII‑A in this case. The Court expressed the view that the argument presented by the appellant lacked any substantive merit and therefore could not persuade the Court. Section 117‑R of the Code was specifically identified by the Court as a deeming provision that assigned a legal consequence to certain settlements. In contrast, Section 52 was explained to refer only to an actual assessment made under Chapter VIII‑A, not to an assessment that was merely deemed to exist because of Section 117‑R. The Court noted that it was not contested that, in fact, no assessment under Chapter VIII‑A had been made in the present matter. Accordingly, the Court held that because the land was not entirely exempt from revenue and because no assessment had actually been fixed under Chapter VIII‑A, Section 52 applied. The Court further stated that the Collector therefore possessed the authority to make an assessment in accordance with the provisions of Section 52. On the basis of these findings, the Court concluded that the appeal lacked any substantive basis and consequently dismissed it with costs. The final order entered by the Court recorded that the appeal was dismissed in its entirety, thereby ending the proceedings.