The Upper Ganges Sugar Mills Ltd vs Khalil-Ul-Rahman And Others on 6 September, 1960

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 196 of 1952

Decision Date: 06/09/1960

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.C. Das Gupta, J.C. Shah

In the matter titled The Upper Ganges Sugar Mills Ltd. versus Khalil‑Ul‑Rahman and Others, decided on 6 September 1960, the Supreme Court of India, comprising Justices K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.C. Das Gupta and J.C. Shah, addressed a dispute concerning tenancy‑Adhivasi rights under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950. The landlord had originally granted a ten‑year lease, referred to as a theka, to the company, with the lease initially terminating in the year 1356 F (the Hindu calendar) and subsequently renewed until 1355 F (June 1948). When the company refused to vacate after the expiry of the renewed lease, the landlord instituted an ejectment suit under the Uttar Pradesh Tenancy Act, 1939. The company defended the suit by asserting that it had become a hereditary tenant pursuant to Section 29 of that Act. The trial court decreed in favour of the landlord on 3 November 1948; the company appealed, and both the appeal and a subsequent second appeal were dismissed. Nevertheless, the company remained in physical possession of the land because the appellate courts issued stay orders that prevented its immediate eviction.

Subsequently, the landlord obtained formal possession through execution on 13 October 1950, but the company continued to resist actual surrender of the premises. On 1 July 1953, the company filed a suit under Section 232 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, seeking to recover actual possession on the basis that it had become an Adhivasi under Section 20 of the same Act. Section 20 provides that any person recorded as an occupant of land in the Khasra or Khatauni for the year 1356 F shall be deemed an Adhivasi and shall be entitled to take or retain possession of that land. The company’s record in the 1356 F entries identified it as a thekedar occupying the disputed land. The landlord contended that the company had not acquired Adhivasi rights for two reasons: first, that the company’s possession in 1366 F was maintained only because of the courts’ stay orders and therefore was on behalf of the courts rather than on its own right; and second, that being recorded merely as a thekedar in 1356 F meant the company held the land on behalf of the landlord, not in its own capacity.

The Court, by a majority opinion written by Justice Sinha C. J., and joined by Justices Gajendragadkar, Wanchoo and Shah, held that the company had indeed acquired the rights of an Adhivasi and was therefore entitled to possession of the land. The Court reasoned that the existence of stay orders did not transform the company’s possession into one held on behalf of the court; rather, the company continued to occupy the land in the same right it possessed before the decree of 3 November 1948. Moreover, although the company was entered in the records as a thekedar, this entry did not preclude it from being considered an occupant in its own right. The Court said that the judicial authority could look beyond the label of thekedar in the Khasra entries and recognize the company’s substantive rights as an Adhivasi. The judgment cited precedents such as Swami Prasad v. Board of Revenue (U.P., 1960 A.L.T. 241), Parshotam Das v. Prem Narain (AIR 1956 All 665), Birjlal v. Murli Pd. (1954 R.D. 175), and Lala Nanak Chand v. Board of Revenue (U.P., 1955 A.L.J. 408) in support of this view. A dissenting opinion, authored by Justice Gupta, argued that the company had not obtained Adhivasi status because the term “occupant” should denote possession in one’s own right, not merely as a recorded thekedar, and that the benefit under Section 20 was available only to those expressly recorded as occupants. The Court ultimately affirmed the company’s entitlement to possession as an Adhivasi.

The Court observed that the company continued to occupy the land after the decree of 3 November 1948, but this continued occupation was not held to be on behalf of the Court. The possession remained in the same character as it had before the decree was passed. Although the company’s name appeared in the land record (Khasra) as a thekedar, the Court held that the company was, in fact, an occupant in its own right and not merely holding the land for the landlord. The Court further noted that it was within its jurisdiction to examine entries in the Khasra that went beyond the label of thekedar. In support of this approach, the Court referred to several earlier decisions, namely Swami Prasad v. Board of Revenue, U.P., (1960 A.L.T. 241), Parshotam Das v. Prem Narain (A.I.R. 1956 All. 665), Birjlal v. Murli Prasad (1954 R.D. 175) and Lala Nanak Chand v. Board of Revenue, U.P. (1955 A.L.J. 408). Judge Gupta, however, expressed a contrary view, stating that the company had not obtained adhivasi rights. He explained that the term “occupant” denotes a person who holds possession in his own name, not on another’s behalf, and that the statutory benefit is available only to those who are recorded as occupants. Consequently, it was impermissible to look beyond the official record to determine whether a claimant was recorded as an occupant. The entry in the Khasra indicating possession “as thekedar” was interpreted as possession on behalf of the thekedar’s lessor, and the Court again cited Swami Prasad v. Board of Revenue, U.P. (1960 A.L.J. 241) in support of this reasoning.

The judgment was issued by the Civil Appellate Jurisdiction in Civil Appeal No. 196 of 1952, arising from an order dated 3 October 1950 of the Board of Revenue, Allahabad, in Review Application No. 161 of 1949‑50, and also by special leave from an order dated 21 January 1956 of the Board of Revenue, Allahabad, in Petition No. 22/1954‑55. Counsel for the appellants in Appeal No. 196 of 1952 and respondent No. 1 in Appeal No. 4 of 1959 were instructed by senior advocates, while counsel for the appellants in Appeal No. 4 of 1959 and respondents in Appeal No. 196 of 1952 were represented by another senior team. The judgment dated 6 September 1960 was delivered by Justice Wanchoo, who noted that the two connected appeals would be decided together. Appeal No. 196 of 1952 was filed by Upper Ganges Sugar Mills Ltd, referred to as “the Company,” whereas Appeal No. 4 of 1959 was filed by Mohammad Khalilul Rehman and other landlords, referred to as “the landlords.” The essential facts were that Mukhtiar Ahmed, the father of the landlords, had granted a lease (theka) to the Company in August 1933 (corresponding to 1341 F) for ten years, terminating in June 1943 (1350 F). The lease contained a clause permitting renewal for five years, which was exercised, extending the lease from 1351 F to 1355 F (up to June 1948). The narrative then continued beyond this point.

The lease agreement contained a clause that permitted the lessee to obtain a renewal of the lease from the lessor. In March 1948 the landlords served a notice on the Company stating that they would not permit any renewal of the lease after the year 1355 Fasli. The Company refused to vacate the premises and consequently the landlords instituted an ejectment suit against the Company under the Uttar Pradesh Tenancy Act of 1939. The Company defended the suit by asserting that it was not a thekadar but a tenant who had acquired hereditary tenancy status in accordance with section 29 of the Uttar Pradesh Tenancy Act. The Court rejected this defence, and the suit was decided in favour of the landlords on 3 November 1948. The Company appealed the decree, but the appellate court dismissed the appeal. The Company then proceeded to a second appeal before the Board of Revenue; this second appeal was also dismissed on 22 July 1950. Throughout the period from November 1948 until July 1950 the Company remained in physical possession of the disputed land, the possession being protected by stay orders granted by the appellate courts.

Execution of the decree was commenced in October 1950. It is recorded that possession of the land was handed over to the landlords on 13 October 1950 and that a Dakhalnama – a document of entry – was filed on 15 October 1950. Nevertheless, the Company resisted actual removal, an act which gave rise to criminal proceedings under section 145 of the Code of Criminal Procedure. A magistrate, acting on the Company’s resistance, ordered the attachment of the land in November 1950 and appointed two superdars to act as caretakers. The Company then applied to the Board of Revenue for a certificate of possession, and the Board granted that certificate, thereby bringing appeal No. 196 before this Court. While these proceedings were ongoing, the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (as amended in 1951) came into force on 1 July 1953. Pursuant to that statute, the Company filed a petition under section 232, read with sections 12 and 20 of the Act, seeking recovery of actual possession of the land. In January 1954 the Sub‑Divisional Officer ruled in favour of the Company, ordering that possession be delivered to it on the basis that the Company was entitled to possess the land both under section 12 and under section 20 of the Act. The landlords appealed this order, but the appellate court dismissed the appeal in January 1955, holding that the Company was entitled to recover possession under section 12 while leaving the claim under section 20 undecided. The landlords then made a second appeal to the Board of Revenue; this appeal was dismissed in January 1956, the Board again deciding solely on the basis of section 12 and refusing to consider the Company’s claim under section 20. Subsequently the landlords obtained special leave to appeal before this Court in May 1956, thereby bringing appeal No. 4 before the Supreme Court. Both appeals were heard on 18 November 1959, after which this Court remitted the matters and directed the Board to make a determination as to whether the Company had acquired any rights under section 20 of the Act.

The Board was asked to determine whether the Company had acquired any rights under section 20 of the Act. The Board submitted its finding, stating that the Company was entitled to the benefit of section 20 and had consequently acquired Adhivasi rights under that provision. Counsel for the landlords acknowledged that if appeal No 4 were to fail and the Company’s right under either section 12 or section 20 were upheld, there would be no need to consider appeal No 196. In that circumstance the Company would have obtained a new right under the Act which would remain unaffected by the decision in appeal No 196, even if that decision were adverse to the Company. Consequently the Court first addressed appeal No 4. Turning to the Company's claim under section 20, it was necessary to examine whether the Company had indeed acquired Adhivasi rights. For this purpose the relevant portion of section 20 was quoted: “Every person who‑ (a) … (b) was recorded as occupant,‑ (i) of any land (other than grove land or land to which section 16 applies) in the Khasra or khatauni of 1356 F, prepared under sections 28 and 33 respectively of the U.P. Land Revenue Act, 1901, or who was on the date immediately preceding the date of vesting entitled to regain possession thereof under clause (e) of sub‑section (1) of section 27 of the United Provinces Tenancy (Amendment) Act, 1947, or (ii) … shall unless he has become a bhumidar of the land under sub‑section (2) of section 18 or an asami under clause (h) of section 21, be called Adhivasi of the land and shall, subject to the provisions of this Act, be entitled to take or retain possession thereof.” Section 232 of the Act further provides that an Adhivasi to whom clause (b) of section 20 applies may apply within thirty months from the date of vesting to the Assistant Collector of the Sub‑Division for being placed in possession of the land of which he is the Adhivasi.

The question therefore arose as to whether the Company was recorded as an occupant of the disputed land, which was clearly not grove land nor land to which section 16 applies. The term “occupant” in this context is not a technical term of art and is not defined anywhere in the Act, the U.P. Tenancy Act, or the Land Revenue Act; consequently it must be given its ordinary dictionary meaning of “a person in occupation.” Accordingly, for the Company to claim the benefit of section 20, it must have been recorded as occupying the disputed land in the year 1356 F. Judicial decisions have limited this meaning by holding that the person must be in occupation in his own right and not merely as a proxy for another. The analysis therefore proceeds on the basis of whether the Company satisfied that criterion.

In this matter, the Court explained that a person could claim the benefit of section 20 only if, in the relevant year, he was occupying the land in his own right and not merely on behalf of another. The term “occupant” was interpreted in its ordinary sense, meaning a person who is in actual occupation. The Court cited the decision in Swami Prasad and another v. Board of Revenue, U. P. (1) to confirm that the requirement of personal occupation was essential. Counsel for the landlords argued that the Company did not satisfy this requirement. Their argument was presented in two parts. First, they maintained that the Company had been ordered to vacate the land on 3 November 1948, which fell within the year 1356 F, and that thereafter the Company remained in possession only because appellate courts had issued stay orders. Consequently, the landlords claimed that the Company’s possession after that date was not on its own behalf but was held on “behalf of the Court”. Second, the landlords contended that because the revenue records in 1356 F listed the Company as a thekadar, its possession must be considered as being held on behalf of the landlords, who were the true owners of the thekadar rights.

The Court found no merit in either of the landlords’ contentions. Regarding the first contention, the Court observed that after the order of 3 November 1948 the Company obtained stay orders from the appellate courts and continued to occupy the land until July 1950, when its second appeal before the Board of Revenue was dismissed. The Court held that the mere existence of stay orders did not transform the Company’s possession into one that was held “on behalf of the Court”. Even though the stays allowed the Company to remain in possession, the possession continued to be in the right asserted by the Company, and it could not be said that the Company was occupying the land as an agent of the court. The Court distinguished the authorities relied upon by the landlords. In Parshotam Das v. Prem Narain (1), a receiver had been appointed and the person recorded in occupation was held to be the receiver’s agent; this situation did not arise here. The Court also differentiated the Board of Revenue’s decision in Birjlal v. Murli Pd. (2), where possession had been transferred back to the occupant after a redelivery, and the record of occupation was based on that redelivery. The present case involved continuous possession that began before the stay order and was merely continued by the stay; therefore, the Company’s occupation remained in its own right and qualified it for the rights under section 20.

The Court observed that the proposition that a person who continues to occupy land solely because an appellate court has issued a stay order must be deemed to hold the land on behalf of the court is inaccurate. In the present matter, the Company had already been in actual possession of the land prior to 3 November 1948 and it continued to occupy the premises after that date, the continuity of possession being supported by various stay orders granted by the appellate courts. Consequently, the Court held that the Company’s possession after 3 November 1948 must be regarded as an extension of the same right it enjoyed before that date, and it could not be characterised as possession held on the court’s behalf.

The landlords next contended that, because the revenue records for the year 1356 F listed the Company as a thekadar, the Company’s possession should be deemed to be held on behalf of the landlords whose thekadar it was. In support of this position, they cited two authorities: A.I.R. 1956 All. 665 and [1954] R.D. 175, relying particularly on the decision in Lala Nanak Chand v. The Board of Revenue, U. P. (1). In that case, the Court held that the requirement of section 20(b) is satisfied by the entry of a person’s name as an occupant in the khasra or khatauni for the year 1356 F; actual possession by that person is not a necessary condition for the entry to be effective. The Court noted that it was unnecessary to re‑examine the correctness of that decision because, in the present case, there was no dispute that the Company was not only entered as an occupant but was also in actual possession of the land in 1356 F.

Nevertheless, the landlords argued that the mere entry of the Company as a thekadar in the revenue records should prevent the Court from looking behind that entry, so that the Company’s occupancy in 1356 F must be treated as occupancy on behalf of the landlords, not as occupancy on its own behalf. The Court pointed out that the Company had also asserted a right to possession under two statutory provisions: as an Adhivasi under section 20 and as a hereditary tenant under section 12, which allows a thekadar, under certain conditions, to become a hereditary tenant. To refute the Company’s claim under section 12, the landlords insisted that the Company was not a thekadar in 1356 F because the theka had expired on 30 June 1948. This stance created a contradiction: while denying the Company’s status as a thekadar for purposes of section 12, the landlords simultaneously claimed that the Company’s possession under section 20 was only as a thekadar for the landlords, not as an independent possessor. The landlords further argued that, for the purpose of applying section 20, the only issue to be examined is the entry in the revenue records, without regard to the nature of the possession.

In this matter, the Court observed that the parties relied on the decision in Lala Nanak Chand’s case, reported at 1955 A.L.J. 408. The Court explained that the cited case dealt solely with the question of whether a person listed in the revenue records needed to prove actual possession. That earlier decision held that it was sufficient for a person to be entered in the revenue records as an occupant, and that it was not required for the person to be physically in possession during the relevant year. The Court noted that it did not need to assess the correctness of that earlier decision for the present dispute. However, the Court emphasized that the Lala Nanak Chand decision did not address the nature of possession, specifically whether possession was on the occupant’s own behalf or on behalf of another. The provisions of section 20(b)(i) of the Act, the Court pointed out, merely refer to a person being recorded as an occupant and contain no language describing the character of the occupancy, such as whether it is on behalf of the recorded person or someone else. The Court held that determining the nature of the occupancy must be based on other evidence, because the entry under section 20(b) does not provide for recording whether the possession is personal or vicarious. The Court further noted that the term “occupant” is not defined in the Act, and neither the Act nor the Rules made under it prescribe a specific format for the entry required by section 20(b). The Court also observed that the reference to a theka continued even after its termination, so long as the Company remained in possession and the lekh‑pal received no order to alter the entry. Consequently, the Court rejected the landlords’ argument that the entry showing the Company as thekadar barred any consideration of possession beyond that entry and required the Court to deem the Company as possessing the land on the landlords’ behalf. The landlords themselves had conceded that the Company was not in possession as a thekadar because the theka had expired before the year 1356 F. In view of these facts, the Court concluded that the Company was recorded as an occupant in 1356 F and that the nature of that occupation was on the Company’s own behalf, not on behalf of the court or the landlords. Accordingly, the Court held that the Company was entitled to Adhivasi rights under section 20. Because this conclusion settled the question of entitlement, the Court found it unnecessary to decide whether the Company also qualified for the benefit of section 12. The Court therefore dismissed Civil Appeal No. 4, held that Appeal No. 196 was rendered infructuous, and ordered that each party bear its own costs of the two appeals. The Court further noted that Justice Das Gupta had reviewed the judgment prepared by his brother, Justice Wanchoo, but expressed disagreement with the view that Upper Ganges Sugar Mills Ltd, the respondent in Civil Appeal No. 4 of 1959, was entitled to the benefit of section 20(b) of the Uttar Pradesh Zamindari Abolition Act.

In this case the Court observed that, although the earlier judgment had been prepared by the brother Justice Wanchoo, it could not agree that Upper Ganges Sugar Mills Ltd, the respondent in Civil Appeal No 4 of 1959, was entitled to the benefit of section 20(b) of the Uttar Pradesh Zamindari Abolition Act. The Court reiterated that the factual background had already been fully set out by Justice Wanchoo and therefore there was no need to repeat those facts. It was accepted as common ground that, if the company could indeed obtain the benefit of either section 20(b) or section 12 of the same Act, then Civil Appeal No 4 of 1959 would have to be dismissed and, as a result, the earlier Civil Appeal No 196 of 1952—filed by the company against a decree of ejectment in favour of the superior landlords—would become infructuous. The Court then reproduced the operative part of section 20, which reads: “Every person who (a) (b) was recorded as occupant (i) of any land (other than grove land or land to which section 16 applies) in the Khasra or Khatauni of 1356 F, prepared under sections 28 and 33 respectively of the Uttar Pradesh Land Revenue Act, (ii) shall unless he has become Bhumidhar of the land under sub‑section (2) of section 18 or an asami under clause (h) of section 21 be called Adhivasi of the land and shall, subject to the provisions of this Act, be entitled to take or retain possession thereof.” The Court noted that the Khasra and Khatauni records had been placed before it and that those documents showed Upper Ganges Sugar Mills Ltd to be recorded as being in possession of the disputed land. However, the records also indicated that the possession was in the capacity of a “Thekadar”. The Court therefore posed the question of whether such entries in the Khasra or Khatauni could support the conclusion that the company had been recorded as an “occupant” within the meaning of section 20(b). Since the term “occupant” was not defined in the Act, the Court held that it must be construed by considering the overall scheme and purpose of the legislation. The appellants, who were the landlords in Civil Appeal No 196 of 1952, had suggested that “occupant” should be understood to mean a person who holds possession in his own right and not on behalf of another. This interpretation had been adopted by the Allahabad High Court in the case of Swami Prasad v. Board of Revenue, Uttar Pradesh, and the Court found that this view had not been challenged before it. Keeping this understanding of “occupant” in mind, the Court examined the entries in the Khasra and Khatauni to determine whether they amounted to a recording of the company as an “occupant”. The Court emphasized that the benefit under section 20(b) is available only to those who are “recorded” as “occupants” and not to every person who may be an occupant in fact. Consequently, the Court needed to decide whether the mere fact of being an occupant was sufficient, or whether the specific entries in the land records were essential to confer the statutory benefit.

The Court observed that if the only requirement for invoking the statutory benefit were the factual condition of being an occupant, and the record could be consulted merely to support or contest a claim, then the judiciary could look beyond the entries in the land‑record books. However, the legislature intentionally linked the benefit under section 20(b) to the specific recording of a person as an occupant, not merely to the factual state of occupancy. In Uttar Pradesh the khasra and khatauni never actually label any individual as an “occupant”; consequently the record must be examined to determine whether it contains facts that satisfy the meaning of that term. The entries before the Court indicate that the Upper Ganges Sugar Mills held possession in the capacity of a Thekadar. Chapter XI of the Uttar Pradesh Tenancy Act (U P XVII of 1939) deals with Thekadar and treats the Thekadar essentially as a rent‑paying farmer whose possession is ordinarily on behalf of his lessor. Thus, a notation of possession “as a Thekadar” in the khasra amounts to a record of possession on behalf of the Thekadar’s lessor. The accepted interpretation of “occupant” in section 20 requires a person to be in possession in his own right, not as a representative of another. Accordingly, the Court held that the entries do not record the Upper Ganges Sugar Mills Ltd. as an occupant. The continuation of the Thekadar entry after the expiry of the contract is irrelevant to the point. The Court could not look beyond the actual wording of the record to decide whether the claimant is “recorded as occupant,” nor could it construe possession by a Thekadar as automatically meaning possession on behalf of the lessor, nor expand the definition of “occupant” to include persons holding land for another. Therefore, the Court found it difficult to agree that the company was entitled to the benefit of section 20(b) of the Uttar Pradesh Zamindari Abolition Act.

The Court noted that because the majority of its colleagues had already concluded that the company was entitled to the benefit, full arguments on the question of the company's entitlement under section 12 were not heard, and no arguments were presented in the related civil appeal No. 196/52. As a result, the Court could not reach a definitive conclusion regarding the disposition of those appeals. Accordingly, the Court ordered that, in view of the majority judgment, the appeals be dismissed. No order as to costs was made.