Kumar Bimal Chandra Sinha vs State of Orissa

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 177 of 1960

Decision Date: 30 April 1962

Coram: Bhuvneshwar P. Sinha, N. Rajagopala Ayyangar, J.R. Mudholkar

In the matter of Kumar Bimal Chandra Sinha versus the State of Orissa, the judgment was delivered on 30 April 1962 by a Bench consisting of Justice Bhuvneshwar P. Sinha, Justice N. Rajagopala Ayyangar and Justice J. R. Mudholkar. The citation of the decision is recorded as 1962 AIR 1912 and 1963 SCR (2) 552. The case arose under the provisions of the Orissa Estates Abolition Act, 1951 (Orissa Act 1 of 1952), specifically sections 2(g), 2(h), 2(i), 3, 5 and 26, and concerned the status of buildings erected on occupancy holdings that were used as Katcheri houses.

The appellants, who held the Paikpara estate as proprietors, had previously purchased certain raiyati lands together with the buildings situated thereon from the raiyat. Consequently, the appellants became occupancy raiyats under the tenure‑holders or sub‑proprietors. By virtue of a notification issued under section 3 of the Orissa Estates Abolition Act, the Paikpara estate was declared vested in the State of Orissa. However, the interest of the tenure‑holders and sub‑proprietors within that estate was not taken over under the provisions of the Act. The buildings on the raiyati lands were employed by the appellants as Katcheri houses for the administration of their estate. State officials subsequently entered into possession of these buildings, which were situated on the raiyati land. The appellants filed an application with the Collector of Puri seeking vacant possession of both the lands and the buildings. The Collector refused the request, holding that the occupancy holding lay within the geographical limits of the estate that had vested in the Government and therefore fell under the estate of the proprietors.

The appellants then instituted a writ petition under article 226 of the Constitution before the High Court of Orissa, seeking relief. The High Court dismissed the writ petition, relying on the view that the question raised had already been effectively decided by the Supreme Court in the earlier case of K. C. Gajapati Narayan v. Deo State of Orissa. The High Court’s conclusion was based on the premise that the lands and buildings under dispute formed part of the estate vested in the State.

On appeal, the Supreme Court examined whether the appellants’ raiyati interests in the lands and in the buildings standing upon those lands were extinguished by the abolition of their interests as proprietors. The Court held that the abolition of proprietorship under the Orissa Estates Abolition Act did not affect the appellants’ raiyati rights to the lands and the structures thereon, and that the State authorities had therefore taken possession of the property illegally. The Court further observed that the Act was intended to abolish all proprietors, sub‑proprietors and tenure‑holders, but expressly did not affect the rights of the raiyat. Consequently, although the lands and buildings were geographically situated within the area of the Paikpara estate, they did not form part of the estate that had vested in the State. The appellants held those properties not as proprietors but as raiyats. Finally, the Court found that the High Court’s reliance on the decision in K. C. Gajapati Narayan Deo v. The State of Orissa was misplaced, because that decision concerned the definition of “home‑stead” in clause (1) of section 2 of the Act and did not address the status of raiyati lands. Therefore, the earlier precedent was not applicable to the present dispute.

The Court observed that the earlier decision had drawn its conclusion by relying on the definition of “home‑stead” contained in clause (1) of section 2 of the Act. In that earlier case the Court, while examining the constitutionality of the Act, was concerned only with buildings standing on a proprietor’s private land that were possessed either by the proprietor or by a tenure‑holder. The observations did not extend to raiyati lands. Consequently, the Court held that the precedent set in K C Gajapati Narayan Deo v. The State of Orissa [1954] S.C.R. 1 was not applicable to the present dispute. The present appeal is Civil Appeal No. 177 of 1960, filed against the judgment and order dated 27 March 1958 of the Orissa High Court in O J C No. 191 of 1956. Counsel for the appellants appeared on their behalf, while counsel for the respondents represented the State of Orissa and its officials. The judgment was delivered on 30 April 1962 by the Chief Justice. The appeal, which arose from a certificate granted by the High Court of Orissa, presented the question of how certain provisions of The Orissa Estates Abolition Act, 1951 (Orissa Act 1 of 1952), hereinafter referred to as the Act, should be interpreted.

The appellants, who had been petitioners in the High Court, were the proprietors of the Paikpara Estate located in the district of Puri and identified by Touzi numbers 268, 269 and 270. The respondents were the State of Orissa and its officials. The factual matrix on which the High Court based its decision was as follows. Within the Paikpara Estate there existed a number of tenures and sub‑proprietor interests. By a notification issued under section 3 of the Act on 23 August 1953, the Paikpara Estate was vested in the State of Orissa. It was unanimously accepted that the interests of the tenure‑holders and sub‑proprietors within that estate had not yet been taken over pursuant to the provisions of the Act. Among those tenure‑holders, certain occupancy holdings had been purchased long ago by the proprietors, the present appellants. By virtue of those purchases the proprietors became occupancy raiyats under the tenure‑holders or sub‑proprietors for the acquired holdings. The final settlement records, known as Khatians, had duly recorded the appellants’ interests as occupancy raiyats. On the lands belonging to these occupancy holdings, several buildings had been erected and were used as Katcheri houses for the administration of the estate. According to the petitioners, in January 1954 State officials took illegal possession of those buildings situated on the raiyati land. The appellants thereafter applied to the Collector of Puri for vacant possession of the lands and the buildings described in the petition, alleging that the lands together with the buildings had been purchased from tenants with occupancy rights, subsequently used as Katcheri houses by the proprietors, and had not vested in the State under the Act.

In the present dispute, the State of Orissa claimed title over the property on the basis of a notification issued under the relevant land acquisition Act. A portion of the building in question had previously been leased to the Postal Department. The local administrative officer, known as the Anchal Adhikari, wrote to the Postmaster and the Superintendent of Post Offices directing them not to continue paying rent to the proprietors. Consequently, the Postal Department vacated the part of the building it was occupying, and that vacated portion subsequently fell under the occupation of the State Government. Another part of the same property, which was being used as a dhangola for the storage of paddy, had been let to a third party. That dhangola was also taken over without lawful authority by the Naib Tehsildar of the area. Additional sections of the property were likewise in the illegal possession of the State Government, this time through the actions of its Anchal Adhikari. On behalf of the proprietors, it was contended that the State Government possessed no legal right to seize the property because the land did not constitute a part of the estate that had been acquired under the Act, nor had it vested in the State Government by the said notification. The learned Collector of Puri rejected the proprietors’ demand and held that the occupancy holding lay within the tenure held by the proprietors and fell within the geographical limits of the state that had vested in the Government. Feeling aggrieved by the Collector’s order dated 20 November 1956, the proprietors approached the High Court invoking Article 226 of the Constitution, seeking relief against what they described as illegal interference with their interests as occupancy tenants rather than as proprietors. The High Court dismissed the proprietors’ claim, primarily on the ground that the question raised before it had been essentially decided by the observations of the Supreme Court in the case of K. C. Gajapati Narayan Deo v. State of Orissa. The Court observed that the controversy in the present matter must be resolved by reference to the provisions of the Act. Accordingly, the definition of “estate” under clause (g) of section 2 of the Act was quoted: “‘estate’ includes a part of an estate and means any land held by or vested in an Intermediary and included under one entry in any revenue roll or any of the general registers of revenue‑paying lands and revenue‑free lands, prepared and maintained under the law relating to land revenue for the time being in force or under any rule, order, custom or usage having the force of law, and includes revenue‑free lands not entered in any register or revenue‑roll and all classes of tenures or under‑tenures and any jagir, inam or muafi or other similar grant.” The Court also reproduced Explanation I, which defines “Land Revenue” as all sums and payments in money or kind, by whatever name designated or locally known, received or claimable by or on behalf of the State from an Intermediary in relation to any land held or vested in such intermediary, and Explanation II, which defines “Revenue‑free land.”

The provision states that the term “land” includes land which is, or would have been except for any special covenant, agreement, engagement or contract, liable to settlement and assessment of land revenue, or land over which the State possesses the authority to enact laws for settlement and assessment of land revenue. Explanation III adds that, with respect to merged territories, the word “estate” as defined in this clause shall also encompass any mahal or village, or any collection of more than one such mahal or village, that is held by or vested in an Intermediary and that has been or is liable to be assessed as a single unit for land revenue, irrespective of whether such land revenue is presently payable, has been released, compounded, or redeemed in whole or in part. The definition then refers to the term “Intermediary”, which is explained in clause (h) as follows: an Intermediary, with reference to any estate, means a proprietor, sub‑proprietor, landlord, landholder, malguzar, thikadar, gaontia, tenure‑holder, under‑tenure‑holder, and includes an inamdar, a jagirdar, Zamindar, Ilaquadar, Khorgoshdar, Parganadar, Sarbarakar and Maufidar, as well as the Ruler of an Indian State merged with the State of Orissa and all other holders or owners of interest in land situated between the raiyat and the State. Explanation I provides that any two or more Intermediaries who hold a joint interest in an estate that is recorded either on the revenue‑roll or on the rent‑roll of another Intermediary shall be treated as a single Intermediary for the purposes of this Act. Explanation II states that the heirs and successors‑in‑interest of an Intermediary, and where an Intermediary is a minor, of unsound mind, or an idiot, his guardian, committee or other legal curator, shall be deemed to be an Intermediary for the purposes of this Act. Consequently, all acts performed by an Intermediary under this Act shall be deemed to have been performed by his heirs and successors‑in‑interest and shall bind them. When the two definitions are read together, the legal position is that “estate” includes, by whatever name it may be called, the interest of every person who holds some right in land between the State at the top and the raiyat at the bottom. In other words, the Act is intended to abolish all Intermediaries and rent‑receivers and to create a direct relationship between the State, in which all such interests vest after abolition under the Act, and the tillers of the soil. The interest of a raiyat is designated by the word “holding” and is defined by the Orissa Tenancy Act (Bihar and Orissa Act II of 1913) as “a parcel or parcels of land held by a raiyat and forming the subject of a separate tenancy”. Under the Orissa Tenancy Act, the unit of interest of a proprietor is an “estate”. A proprietor may have a number of sub‑proprietors, and the term “sub‑proprietor” is also defined in the Tenancy Act, although that class of land holders is not relevant to the present case. The interest of a tenure‑holder or an under‑tenure‑holder is characterised as a “tenure”. Thus, the process of feudal and sub‑

In the regions where the Permanent Settlement was implemented – namely Bengal, Bihar, Orissa, Madras and Andhra Pradesh – the system of infeudation produced a hierarchy of land interests. This hierarchy began with proprietors who possessed estates, beneath whom were sub‑proprietors, then tenure‑holders, followed by under‑tenure‑holders, and finally the actual cultivator of the soil, known as the raiyat, whose legal interest was described as a “holding.” The legislation under review was enacted to abolish all classes of proprietors, sub‑proprietors, tenure‑holders and under‑tenure‑holders, regardless of the various names by which they might be called, but it expressly left the raiyat’s interest untouched. It was recognized that a single individual could, by transfer or by operation of law, occupy more than one position with respect to the same parcel of land. For example, a person might be the proprietor of a portion of land that falls within a larger estate, while the same land could be occupied by a raiyat who does not hold directly from the proprietor but from a tenure‑holder who, in turn, holds from the proprietor. The proprietor might have acquired the raiyat’s interest, thereby becoming the owner of the entire estate and, at the same time, a purchaser of the raiyat’s interest, paying rent for that interest to the immediate landlord, the tenure‑holder. Conversely, the tenure‑holder could be liable to pay rent to the proprietor. This complex arrangement appears to be the factual backdrop of the present case. The respondents, identified as the appellants, possessed the Paikpara estate in the capacity of proprietors. In addition, they seem to have bought certain raiyati lands that included buildings from the raiyat. Consequently, the legal position is that although these lands with the buildings are geographically situated within the limits of the appellants’ estate, they do not form part of that estate. In other words, the appellants hold the properties bearing the buildings not as proprietors, but as raiyats themselves.

The lower tribunals, however, did not appreciate this distinction with sufficient clarity. The Collector, in the initial proceeding, and subsequently the High Court, while entertaining the petition under Article 226 of the Constitution, apparently erred by conflating the appellants’ former status as proprietors with their present status as raiyats concerning the land on which the buildings are erected. The High Court, relying on the earlier decision of this Court in K C Gajapati Narayan Deo v State of Orissa, observed that the question of whether the buildings would vest in the Government upon vesting of the estate under section 3 of the Act should not depend on whether the buildings formed part of the estate acquired by the Government, but rather on the purpose for which the proprietors used the buildings. Because the buildings in question had primarily served as an office or Katcheri for the collection of rent, as quarters for servants, or as storage for grain paid in kind as rent, the High Court concluded that the buildings would vest in the Government simultaneously with the vesting of the estate itself. The present Court considered that conclusion to be unsupported by law.

In this case, the Court observed that the High Court’s reliance on the Supreme Court’s earlier decision was not legally sound. The High Court had based its conclusions on passages of the Supreme Court’s judgment on pages twenty‑five and twenty‑six, wherein the Supreme Court stated: “Assuming that in India there is no absolute rule of law that whatever is affixed to or built on the soil becomes a part of it and is subject to the same rights of property as the soil itself, there is nothing in law which prevents the State legislature from providing as a part of the estates abolition scheme that buildings, lying within the ambit of an estate and used primarily for management or administration of the estate, would vest in the Government as appurtenances to the estate itself. This is merely ancillary to the acquisition of an estate and forms an integral part of the abolition scheme. Such acquisition would come within article 31 (2) of the Constitution and if the conditions laid down in clause (4) of the article are complied with, it would certainly attract the protection afforded by that clause. Compensation has (1) (1954) S.C.R. 11, been provided for these buildings in s. 26(2)(iii) of the Act and the annual rent of these buildings determined in the prescribed manner constitutes one of the elements for computation of the gross asset of an estate.” The Court noted that the quoted observations referred to the definition of “homestead” contained in clause (i) of section 2 of the Act, which reads: “homestead means a dwelling house used by the Intermediary for the purpose of his own residence or for the purpose of letting out on rent together with any courtyard, compound, garden, orchard and outbuildings attached thereto and includes any tank, library and place of worship appertaining to such dwelling house but does not include any building comprised in such estate and used primarily as office or kutchery for the administration of the estate on and from the … day of January, 1946.” From this definition, the Court explained that the legislature had placed the proprietor’s homestead into two distinct categories: first, a dwelling house used by the Intermediary for his own residence or for letting out on rent; and second, any building that formed part of the estate and was used primarily as an office or Katcheri for the administration of the estate, as specified on the listed day of January 1946. Regarding the first category, section 6 of the Act provides that the portion of the homestead falling within this description shall be deemed to be settled by the State with the Intermediary, who shall continue to hold it as a tenant of the State Government, subject to the payment of a fair and equitable ground rent, except where existing law provides that no rent is payable in respect of homestead lands. The Court further observed that the second category, as defined in the homestead provision, refers only to “any building comprised in such estate” and makes no reference to any building situated on raiyati holdings or any portion thereof. This distinction, the Court held, makes the High Court’s conclusion untenable.

With reference to the provisions of section 5, which set out the consequences of vesting an estate in the State, the Court noted that clause (a) of that section provides that the entire estate, including all categories of land described in detailed terms and also other lands that are not raiyati, vests absolutely in the State Government. The Court further observed that, when it examined the constitutionality of the Act, it did not consider raiyati lands at all. Its discussion was limited to buildings that stood on the proprietor’s private lands such as peel, seer, Zirat and similar holdings, and which were possessed either by the proprietor himself or by a tenure‑holder. Consequently, the Court concluded that the foundation of the High Court’s judgment was entirely lacking. The High Court, however, was not unaware of this distinction, as demonstrated by the following passage in its judgment: “Doubtless, Ryoti lands are excluded from the scope of this clause. But buildings and structures standing on Ryoti lands and in the possession of the proprietor are not expressly saved.” The Court accepted the first sentence as correct but disagreed with the second, holding that there was no question of expressly saving structures on raiyati lands because the Act did not legislate with respect to raiyati lands. The same observation applied to the reference in section 26(b)(iii). Section 26 begins with the words “for the purpose of this chapter”, referring to Chapter V, titled “Assessment of Compensation”. By reading section 26 as a whole, the Court found it clear that, for the purpose of assessing the compensation payable to the outgoing proprietor or tenure‑holder of the estate to be acquired, the gross assets must be determined by aggregating the rents payable by tenure‑holders, under‑tenure‑holders and raiyats. Accordingly, the rent payable by the appellants in their capacity as raiyats for the disputed lands would form part of the assets that must be included in the gross‑asset calculation for compensation. However, the Court stressed that this inclusion did not imply that the interests of raiyats also vested in the State as a result of the notification under section 3 read with section 5. For the reasons stated, the Court held that the appellant’s raiyati interests in the lands and in the buildings standing on those lands had not been affected by the abolition of his interest as a proprietor, and that the State authorities had illegally taken possession of those interests. The appeal was therefore allowed with costs, both in the present Court and in the lower Court.