Jyotish Thakur And Ors. vs Tarakant Jha And Ors.

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

Court: supreme-court

Case Number: Not extracted

Decision Date: 11 September, 1962

Coram: J.R. Mudholkar, K.C. Das Gupta, P.B. Gajendragadkar

In the appeal titled Jyotish Thakur and others versus Tarakant Jha and others, decided on 11 September 1962, a bench consisting of Justices J. R. Mudholkar, K. C. Das Gupta and P. B. Gajendragadkar heard the matter. Justice Das Gupta delivered the judgment. The central issue before the Court concerned whether a person who was originally a raiyat of certain lands in the District of Santhal Parganas, upon acquiring the complete interest of the superior landlord, ceased to retain the raiyati interest or continued to hold that interest in addition to becoming a superior landlord. The dispute arose out of a suit for declaration and delivery of possession of a parcel measuring twelve bighas, sixteen kathas and four dhurs situated in Mauza Chhatahara, also in the District of Santhal Parganas. The plaintiffs in the suit and the four defendants described in the plaint as “defendants second party” were the successors in interest of a person named Santokhi Jha, who many years earlier had become the owner of the entire raiyati interest in the land. After becoming a raiyat, Santokhi Jha purchased, by a registered deed, the entire interest of the Lakhirajdar under whom he formerly held the raiyati status. On 15 May 1935, the defendants second party and other parties, including plaintiffs numbered one through six, conveyed the land to the present appellants. The plaintiffs contended that the conveyance did not transfer any interest to the purchasers because the land retained its raiyati character on the date of the 1935 deed, and that under Regulation III of 1872 such raiyati land was inalienable. They further pleaded that the 1935 transfer was fraudulent and collusive and that there was no legal necessity for the conveyance.

The defendants, described as the first party, denied any allegation of fraud or collusion and asserted that the transfer was made out of legal necessity in order to discharge earlier family debts, rendering it binding upon the plaintiffs. In addition, they argued that at the time of the 1935 sale the land was not raiyati but Bakasht land belonging to the Malik, and consequently there was no prohibition on its sale under Regulation III of 1872. The Subordinate Judge of Dumka, who tried the suit, held that the sale was justified by legal necessity, was not fraudulent or collusive, and although the plaintiffs were not estopped from challenging the deed, the deed remained binding on them. The trial Judge further expressed the opinion that after Santokhi, the raiyat, acquired the landlord’s interest, the land ceased to retain its raiyati character and thus the plaintiffs’ contention that the land was inalienable under section 27 of Regulation III of 1872 was rejected. Accordingly, the trial Court dismissed the suit. On appeal, the District Judge of Santhal Parganas affirmed the findings of the trial court and held that the dismissal was correct. The plaintiffs then appealed this decision to the High Court of Judicature at Patna.

In Patna, the High Court considered an appeal in which the parties did not dispute the trial court’s finding that the sale deed had been executed out of legal necessity and that it was neither fraudulent nor collusive. The sole ground of the appeal was the contention that the raiyati interest in the land persisted despite the fact that the sole raiyat, Santokhi, had acquired the landlord’s interest and that the later entries in the settlement records described the land as Bakasht Malik. Justice Banerjee, who heard the appeal, expressed the view that there was no inconsistency between the various entries in the record of rights: the earlier entry identified the land as being held by Santokhi in his capacity as raiyat, while the subsequent settlement entries recorded the land as Bakasht Malik. He held that, in law, the raiyati interest continued to exist even after the raiyat had acquired the superior landlord’s interest. He further examined whether the equitable doctrine of merger could be invoked in situations where the interests of the raiyat and the landlord were united, as might occur in the Santhal Parganas. After analysing the facts and circumstances, he concluded that no merger had taken place. He also rejected the respondents’ argument that the plaintiffs were estopped from challenging the sale deed. Consequently, he allowed the appeal and declared the sale void with respect to the raiyati interest. The defendants then filed a Letters Patent Appeal, which was dismissed. The judges hearing that appeal agreed with Justice Banerjee that the earlier settlement’s raiyati interest remained effective “in spite of the entry ‘Bakasht Malik’ in the subsequent settlements” and that the raiyati interest could not be transferred by the sale deed dated 15 May 1935. The High Court nevertheless issued a certificate under section 110 of the Code of Civil Procedure read with Article 135 of the Constitution of India, stating that the case satisfied the requirements for appeal to the Supreme Court. On the basis of that certificate, the first‑party defendants lodged the present appeal. The primary contention raised by Mr Jha in support of the appeal was that, after acquiring the Lakhirajdar’s interest, Santokhi ceased to be a raiyat. He advanced a two‑fold argument: first, that the law of merger required an automatic merger of the raiyati interest into the larger Lakhirajdar’s interest; and second, that Santokhi had the option to merge the raiyati interest into the Lakhirajdar’s interest and that he had exercised that option. The first argument reflected the English common‑law doctrine of merger, as articulated by Blackstone in his Commentaries on the Laws of England (Vol II, 4th Edition, p. 151): “Whenever a greater estate and a less coincide and meet in one and the same person without any intermediate estate, the less is immediately annihilated; or in the law phrase, is …”

The Court explained that the common‑law rule states that when a greater estate and a lesser estate coincide in the same person, the lesser estate is said to be merged, that is, it is sunk or drowned in the greater estate. However, English equity quickly intervened to soften the harshness of this rule by holding that the intention of the parties must be examined to determine whether a merger has actually occurred. The statutory enactments contained in the Judicature Act of 1873 and later in the Law of Property Act of 1925 made it clear that a merger is recognised only when it is present at both common law and in equity. F. A. O. expressed this principle in his treatise on landlord and tenant, stating that if the circumstances are such that a court of equity would have previously found no merger in equity, then there is now no merger at law either. In situations where the parties have not expressly manifested an intention, English courts have sought to infer the intention by considering the advantage obtained by the person in whose hands the interests combine. On the question of intention, the courts have also adopted a presumption against merger whenever it can be shown that either the duty or the interest of the person acquiring the outstanding estate requires that the two estates remain distinct, as noted in Re Fletcher, [1917] 1 Ch. 339.

The Court further observed that, although the doctrine of merger was not raised before the Bar in the present matter, English law on the subject has historically shaped Indian judicial thinking. An early illustration of this influence arose in 1868 before the Calcutta High Court in the case of Noomesh v. Rai Narain, [(1868) 10 W.R. 15], where the question was whether the merger doctrine applied when a patni taluk passed into the possession of a zamindar. The Court answered negatively, and Sir Barnes Peacock, delivering the judgment, remarked that his impression was that the merger doctrine does not apply to lands in the mofussil of this country. He explained that zamindars commonly purchase and retain patni taluks, often using a trustee to avoid merger, a practice modelled on English law, because if the merger doctrine applied a zamindar could not purchase and hold a patni tenure in khas possession. Similar conclusions were reached in Ruston v. Atkinson, [(1869) 11 W.R. 485], and Savi v. Panchanan, [(1876) 25 W.R. 503]. Nevertheless, in the 1878 decision of Prosonna v. Jagat, [(1878) 3 C.L.R. 159], the Court held that while the mere union of superior and subordinate interests does not automatically cause merger, the conduct of the party may reveal an intention not to preserve the interests as distinct, and where such intention is demonstrated, the merger should be recognized.

In the decision of the Privy Council in Raja Kissen Dutt Ram v. Raja Mumtaz Ali Khan, [(1879) I.L.R. 5 Cal. 198], a statement was made that it was possible for resumable birt tenures to merge into a superior interest where the holder failed to take steps to keep the two interests distinct. After that decision, a larger number of cases were decided in which the Calcutta High Court adopted the view expressed in Prosonna v. Jagat, [(1878) 3 C.L.R. 159]. The Court held that when the conduct of the party concerned showed that he did not intend to keep the two interests alive as mutually distinct rights, the union of the superior and subordinate interests would result in the merger of the latter into the former. This principle was applied in Surja Narain Mandal v. Nand Lall Sinha, [(1906) I.L.R. 33 Cal. 1212]; Ulfat Hossain v. Gayani Dass, [(1909) I.L.R. 36 Cal. 802]; Promotha Nath Roy v. Kishore Lal Sinha, [(1916) 21 C.W.N. 304]; and Dakshavani Dasi v. Amrita Lal Ghosh, [(1919) 23 C.W.N. 826]. A similar view was expressed by the Patna High Court, through Chief Justice Chamier and Justice Sharfuddin, in Lachanbati v. Bodhnath, [A.I.R. 1918 Pat. 651]. Statutory provisions dealing with merger were introduced by the Transfer of Property Act of 1882 and the Bengal Tenancy Act of 1885, the latter later being extended to Bihar. These statutory provisions, however, do not apply to the present case. Apart from the statutes, the general position on merger in India may be summarised as follows: the mere union of a superior and a subordinate interest does not automatically produce a merger; a merger is held to have occurred only when the intention to merge is clear. In the absence of any express indication of such intention, the courts will presume that the party had no intention to merge if merging would be contrary to his interests or if a duty existed on him to keep the interests separate. In determining the party’s intention, the courts also consider his conduct. To this general statement of law it is necessary to add that the land tenure system in the Santhal Parganas possesses special features that make the application of the merger doctrine difficult. The Santhal way of life fostered a powerful village community that enjoys special rights over all village lands. This community of village raiyats possesses preferential and reversionary rights over every piece of land in the village, whether cultivated or uncultivated, as noted in the Final Report on the Survey and Settlement Operations in the District of Santhal Parganas. In most villages of the district there is a headman who, in addition to performing certain village duties, collects rents from the raiyats and remits them to the proprietor. The headman, however, is not a holder of tenure. One of his duties in that capacity is to arrange for the settlement of lands in his village that may become vacant and available for settlement.

The headman of each village was responsible for identifying parcels of land within his village that might become vacant and then making those parcels available for settlement. Every raiyat residing in the village was entered in the Jamabandi that was prepared for that village, and the headman’s specific duty was to allocate any available land to one of the raiyats who were listed in the Jamabandi. It is easy to understand that both the collective interests of the village community and the personal interests of the headman would be jeopardised if a piece of land that, as raiyati land, was part of the Jamabandi were removed from the total amount of raiyati lands. Once raiyati lands were permitted to lose their character as raiyati land, a village could, within a few years, witness a rapid decline in the overall stock of land that remained available for settlement to resident raiyats, a loss that would be plainly visible to the community. In that circumstance, the government issued orders in 1887 that prohibited the alienation of raiyat holdings in any form. Those orders had the immediate effect of checking the open‑transfer practice that had emerged during the early years of Wood’s Settlement; nevertheless, transfers disguised in other forms persisted, requiring constant vigilance by officials to prevent village lands from passing into the hands of outsiders whose intrusion into the village community was regarded as harmful (see Appendix XV of the Settlement Report of the Santhal Parganas). In a note dealing with the alienation policy for lands in the Santhal Parganas, the government official Mr McPherson expressed a strong opposition to permitting any sales in any form. He wrote, “To allow sales in any form will, I think, tend to weaken the communal system of the Santhal Parganas and the position of the Pradhan. The root idea of the system is that all the cultivated lands of the village belong in a way to the whole community.” His recommendation was accepted, leading to an amendment of Regulation III of 1872 that altered the prohibition on transfer. As a result of that amendment, Section 27 now reads as follows: “27. (1) No transfer by a raiyat of his right in his holding or any portion thereof, by sale, gift, mortgage, lease, or any other contract or agreement, shall be valid unless the right to transfer has been recorded in the record of rights, and then only to the extent to which such right is so recorded. (2) No transfer in contravention of sub‑section (1) shall be registered, or shall be in any way recognised as valid by any court, whether in the exercise of civil, criminal or revenue jurisdiction. (3) If at any time it comes to the notice of the Deputy Commissioner that a transfer in contravention of sub‑section (1) has taken place, he may, in his discretion, evict the transferee and either restore the transferred land to the raiyat or any heirs of the raiyat who has transferred it, or re‑settle the land with another raiyat according to the village custom for the disposal of an”

The provision concerning an abandoned holding allowed eviction of a transferee only when three conditions were satisfied: first, the transferee had not possessed the land continuously for twelve years; second, the transferee was given a reasonable opportunity to show cause against the eviction order; and third, every action taken by the Deputy Commissioner under this provision was subject to the supervisory authority of the Commissioner. It was necessary to keep this legal background in mind while addressing whether the doctrine of merger could be applied to lands in the Santhal Parganas. Counsel for the respondents argued that a raiyat is legally required to keep his raiyati interest distinct even after acquiring a superior interest, and the Court found considerable merit in that submission. Even assuming that it might benefit the individual raiyat to abandon his raiyati interest in order to eliminate the transfer restriction, the customs of the village community and the authority of the Pradhan imposed a duty on the raiyat to preserve his raiyati interest. Consequently, the Court observed that, on a preliminary basis, a raiyat in the community villages of the Santhal Parganas – which comprise most of the district – does not possess the right to extinguish his raiyati interest even after obtaining the superior interest. Accordingly, the Court inclined to maintain the present view that the doctrine of merger does not apply to raiyati holders in the Santhal Parganas, although it declined to pronounce a final decision on that point in the present case.

Even if one were to accept that a raiyat could treat his raiyati interest as merged with his proprietary interests, the evidence in this case failed to demonstrate that Santokhi had taken such a step. The appellants relied on Exhibit I, a certified copy of the order‑sheet in Settlement Objection Case No. 41 of 1909, to claim that Santokhi had merged his raiyati interest into his Lakhirajdar interest. The objection concerned the entry in the record of rights for the land presently in dispute. After noting that Santokhi had purchased the Zamindari interest three years earlier, the order stated: “Santokhi is now the Zamindar and the sole raiyat in the village. It seems necessary to have him as Pradhan now. He wants the village to be made Khas and his jote interest as Bakasht Malik. I think this should be allowed. Submitted to Settlement Officer.” The Settlement Officer approved the proposal, and the record was amended to insert “Bakasht Malik” against the land. Counsel for the respondent attempted to persuade the Court that by requesting his jote interest to be recorded as Bakasht Malik, Santokhi was treating his raiyati interest as terminated. The Court was not convinced by this argument. The term “Bakasht Malik,” as used by settlement authorities, meant “in the cultivation of the owner.” A settlement report on the Santhal Parganas explained that some agricultural lands formerly owned by raiyats had come into the possession of proprietors, often through purchase at auction, and were entered as “Bakasht Malik” in both Pradhani and Khas villages. A footnote clarified that “Bakasht Malik lands are in the cultivating possession of landlords, but not privileged,” while another note defined “Khas Khamat” as privileged lands privately held by landlords. The Court therefore found no basis to accept the argument that the assertion of Bakasht Malik status implied a denial of the land’s raiyati status, and it could not find any justification for the claim that Santokhi’s prayer for Bakasht Malik status amounted to a merger of his raiyati interest.

The Court observed that the argument relying on an alleged termination of the raiyati interest was unconvincing. It accepted that the term “Bakasht Malik,” as employed by the settlement authorities, signified “in the cultivation of the owner.” The Court referred to page 83 of the Settlement Report on the Santhal Parganas, which explained that in a few villages agricultural lands that had formerly belonged to raiyats had passed into the hands of proprietors, usually through purchase at auction sales conducted when courts were selling raiyati jots for arrears of rent. Those lands were then entered in the records as “Bakasht Malik,” a practice that occurred in both pradhani and khas villages. A foot‑note in the same report defined “Bakasht Malik” as lands in the cultivating possession of landlords but not privileged. The report further noted that “Khas Khamat” referred to privileged lands in the private possession of landlords. The Court found no basis for Mr Jha’s contention that the designation “Bakasht Malik” implied a denial of the raiyati character of the land. It held that when Santokhi prayed for the land to be recorded as “Bakasht Malik,” his sole purpose was to update the record to reflect that the land, previously noted as being in the cultivating possession of a raiyat under a landlord, was now in the cultivating possession of the landlord himself. This correction was necessitated by the fact that Santokhi, originally a raiyat, had acquired the landlord’s interest. The Court warned against interpreting Santokhi’s request as an intention to end the raiyati nature of the land or to merge his raiyati interest into the landlord’s interest. In the Court’s view, it was not in Santokhi’s interest to allow the raiyati status to cease, because as long as his raiyati interest remained alive he retained the rights of a raiyat in the village Jamabandi lands, rights that would be lost if the raiyati interest ended. Any perceived advantage from removing the bar against transfer would, in fact, be more detrimental to him and his family in the long term.

Considering all circumstances, the Court concluded that it was clearly to Santokhi’s benefit to keep the raiyati interest distinct and separate from the Zamindari interest he had acquired, and that this separation aligned with his duties under the community village system in the Santhal Parganas. Even if the doctrine of merger were applicable in the Santhal Parganas—so that a person possessing both interests could elect to treat them as one, causing the lesser interest to merge into the larger—the Court found no evidence that Santokhi made such a choice. Accordingly, Santokhi must be held to have intended to retain the two interests as distinct and separate, leading the Court to reach the conclusion that the raiyati interest did not merge into the proprietary interest.

The Court observed that the raiyati interest never merged into the proprietary interest. The next contention raised by the respondent’s counsel was that a later entry in the record of rights should override an earlier entry, and that such an approach would benefit his clients only if the later entry, describing the land as Bakasht Malik, effectively denied the existence of the raiyati interest. The Court held that the expression “Bakasht Malik” did not constitute a denial of the raiyati interest but was merely a neutral description concerning whether the raiyati interest continued or not. Consequently, there was no real conflict between the earlier settlement entry and the later entries, and no issue arose as to which entry should prevail. For the same reasons, the argument that the Settlement Officer’s decision declaring the land to be Bakasht Malik operated as res judicata was found to be irrelevant, because the plaintiffs were not required to challenge the correctness of that entry. Another point advanced by the respondent’s counsel was that the question of whether the raiyati interest survived after Santokhi acquired the proprietary interest was purely a question of fact, and that the Trial Court and the Court of First Appeal had held that the interest had ceased, thereby precluding the High Court in the second appeal from revisiting that finding. The Court disagreed with this characterization, stating that, given the facts and circumstances of the present case, the issue could not be categorized as a pure factual question. The determination required a proper understanding of the doctrine of merger as it applied in the Santhal Parganas, and therefore the question of the continued existence of the raiyati interest after Santokhi’s purchase of the proprietary interest was a mixed question of law and fact. Accordingly, the argument that the High Court was not justified in examining the conclusions of the lower courts was without merit.

The Court further explained that because Santokhi’s raiyati interest did not merge with his proprietary interest and continued to exist side by side, the sale made by the plaintiffs and other successors‑in‑interest of Santokhi in 1935 did not, in law, convey the raiyati interest to the purchasers. It was accepted as common ground that the right to transfer the raiyati interest was never entered in the record of rights for the lands in question. As a final argument, the respondent’s counsel submitted that the civil court lacked jurisdiction over the matter and that the only possible relief for an invalid transfer of a raiyati interest lay in section 27(3) of the Regulations. The Court noted that this sub‑section empowered the Deputy Commissioner of the District to evict the transferee and either restore the land to the raiyat or his heirs, or to re‑settle the land with another raiyat according to village custom, if at

The regulation permits the Deputy Commissioner to act whenever he learns of a transfer that violates sub‑section 1 of section 27. The Court found no indication that the relief provided in sub‑section 3 was meant to be exhaustive or to prevent any other remedies from being granted by the courts. Moreover, sub‑section 2 of section 27 declares that any transfer contravening sub‑section 1 shall not be recognised as valid by any court, thereby obligating civil courts to disregard such transfers in title disputes. To fulfil this duty, the Court must first determine whether the transfer upon which a litigant bases his claim actually violated sub‑section 1 of section 27. If the Court is satisfied that such a violation occurred, it must dispose of the suit on the premise that the transferee acquired no legal title from the invalid transfer. Consequently, the argument that sub‑section 3 of section 27 prevents the plaintiffs from obtaining relief in the civil proceeding cannot succeed. The Court also noted that none of the lower tribunals had raised this objection on behalf of the present appellants. The regulation further stipulates that any civil proceeding seeking to confirm title must treat the offending transfer as null and void, thereby preventing the claimant from relying on it for ownership. Accordingly, the Court emphasized that the mere existence of a recorded deed does not override the statutory prohibition when the transfer breaches section 27(1).

Turning to the authorities cited, the Patna High Court in Sarda Devi v. Ram Louchan Bhagat [A.I.R. 1926 Pat. 444] held that section 27 of the 1872 Regulation does not forbid a landlord from transferring his interest in a raiyati holding if he subsequently obtains possession of that holding. The Court expressed that, should that decision be interpreted to mean the landlord’s raiyati interest also passed by the transfer, the interpretation would be erroneous. Nevertheless, the High Court carefully observed that the sale in question concerned the judgment‑debtor’s four‑anna Brahmottar interest and the sixty‑two bighas of land held in the capacity of a Brahmottardar. That description aligns with the provision that section 27 bars the transfer of the raiyati interest but does not restrict the conveyance of a landlord’s separate interest which may coexist with a raiyati interest. The Court then referred to Madan v. Kheelu [(1957) I.L.R. 36 Pat. 439], a decision also cited by counsel for the respondent, where the Patna High Court examined whether certain lands formed part of the plaintiff’s father’s Ghatwali holdings. The Court observed that the distinction between raiyati interest and the landlord’s separate interest is crucial, because the statutory bar applies only to the former and not to any ancillary rights the landlord may possess. In light of this analysis, the Court concluded that the authorities cited did not support a view that the raiyati interest could be transferred lawfully, and therefore the present claim could not rely on them.

In the matter before the Court, the land records showed that the parcels of land were described as “appertaining to Mahal Ghatwali” and were held by Maharaj Rai Ghatwal in the character of his Bakasht. The High Court examined the provisions of section 25 of the Regulations and concluded that the entry made in the 1932 Revision Survey and Settlement, which recorded the lands as Bakasht, was the prevailing description. In the same reasoning, the High Court held that the term Bakasht was sufficiently broad to encompass the categories of khul‑kast, sir and Zerait, and that, given the facts before it, the earlier entry of raiyat in the 1904 record was erroneous and should have been recorded merely as Ghatwal. The learned judges stressed that no evidence had been produced to establish the identity of the alleged raiyati holder or the time at which the land might have come into the possession of Maharaj Rai. Conversely, it was proved that the land had never been raiyati property of the appellant but constituted the pradhani jote of Maharaj Rai Ghatwal. The Court indicated that it was unnecessary to determine definitively whether, under the specific facts and circumstances of that earlier case, the High Court’s decision was correct. It was sufficient to observe that the earlier decision did not intend to hold that a Bakasht entry always extinguishes a raiyati right. The judges also noted that the learned judges hearing the present appeal had considered the earlier High Court decision and had distinguished it on the ground that the former finding was limited to its own factual matrix. Accordingly, the present Court concluded that the High Court was correct in holding that the sale dated 15 May 1935 was void insofar as it pertained to the raiyati interest, while the right to receive rent was the only interest that passed to the first‑party defendants by that sale. Consequently, the appeal was dismissed with costs and the appeal was formally set aside.