Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Civil Appeal Nos. 282 and 283 of 1959
Decision Date: 02/05/1962
Coram: Bhuvneshwar P. Sinha, P. B. Gajendragadkar, K. N. Wanchoo, N. Rajagopala Ayyangar
In the matter of Mohanlal Chunilal Kothari versus Tribhovan Haribhai Tamboli, the judgment was delivered on 2 May 1962 by the Supreme Court of India. The opinion was authored by Justice Bhuvneshwar P. Sinha and the bench was composed of Justice Bhuvneshwar P. Sinha, Justice P. B. Gajendragadkar, Justice K. N. Wanchoo, Justice N. Rajagopala Ayyangar, and Justice T. L. Venkatarama. The petitioner was Mohanlal Chunilal Kothari and the respondent was Tribhovan Haribhai Tamboli. The case is reported in 1963 AIR 358 and 1963 SCR (2) 707.
The dispute arose from lands that had formerly formed part of the State of Baroda but had become incorporated into the State of Bombay following a merger. The Bombay Tenancy and Agricultural Lands Act, 1948, was extended to the territory of Baroda on 1 August 1949. The landlords, who were the appellants, instituted suits in the Civil Court for possession of the lands against the tenants, who were the respondents. The landlords alleged that the tenants had become trespassers with effect from the beginning of the new agricultural season in May 1951. The Civil Court decreed possession in favor of the landlords, and the decree was affirmed by the first appellate court. However, the High Court, on appeal, set aside those decrees and dismissed the suits. The High Court held that, under section 3A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant became a protected tenant from 1 August 1950, and that this protected status could not be defeated by the notification dated 24 April 1951 issued under section 89(1)(d) of the 1948 Act, which purported to exclude the subject land from the operation of that Act. The High Court further held that the 24 April 1951 notification did not have retrospective effect and did not remove the protection afforded to tenants by section 3A.
The landlords obtained special leave to approach this Court. They conceded that, if the 1948 Act applied to the tenancies in question, their suits for possession would fail because only revenue courts would have jurisdiction over such matters. Their principal reliance was on the 24 April 1951 notification, which they argued excluded the lands from the Act. They also contended that a later notification, which cancelled the earlier one, could not divest the landlords of rights that had accrued under the first notification. The Court held that the 24 April 1951 notification was indeed cancelled by a subsequent notification dated 12 January 1953. The second notification was issued while the appeal was still pending before the first appellate court. Consequently, the suits had to be decided on the basis that no notification was in force to remove the lands from the operation of the 1948 Act. The Court found the first appellate court to have been incorrect in holding that the suits should be decided according to the factual position existing on the date the suits were originally filed.
In this case the Court held that the suits could not be decided by referring only to the facts that existed on the date the suits were filed. The Court further held that the second notification, which cancelled the earlier notification of April 24, 1951, did not extinguish any rights that had already accrued to the landlords. The Court explained that, had the landlords obtained a decree that became final and had succeeded in evicting the tenants under that decree, such a decree could not be reopened and the execution of that decree could not be recalled. Nevertheless, the Court observed that the second notification cancelling the first was issued while the appeal was still pending, and therefore the Court was required to apply the law that prevailed at the time of its judgment.
The Court also examined the operation of sections 88(1) and 89 of the Bombay Tenancy and Agricultural Lands Act of 1948. It held that clauses (a), (b) and (c) of section 88(1) applied to matters as they existed on the date the Act commenced, whereas clause (d) empowered the State Government to declare, by notification in the Official Gazette, certain areas to be reserved for urban non‑agricultural or industrial development. The Court noted that clauses (a) to (c) expressly provided that the Act would not apply to particular areas identified at the time of its inception. In contrast, clause (d) referred to future determinations and could only take effect when the State Government issued a notification specifying the areas to be removed from the operation of the Act.
In the earlier case of Sukharam v. Manikchand, the Court clarified that it had never intended to hold that clause (d) of section 88 was purely prospective and lacked any retrospective effect. Unlike clauses (a) to (c), which were clearly prospective, clause (d) possessed a limited retrospective operation because it could apply to land that later fell within a notification issued by the Government, thereby removing that land from the protection afforded by the 1948 Act. The Court further explained that, for clauses (a) to (c), the 1948 Act would not apply to lands covered by those provisions, but this non‑application did not affect rights that had been conferred under the earlier 1939 Act, which the 1948 Act repealed. Section 89(2) expressly preserved the existing rights that existed under the repealed Act.
The Court observed that the issue in Sukharam’s case concerned the effect of clause (c) on the rights that existed under the 1939 Act, and in that context it had described section 88 as prospective. However, the Court emphasized that clause (d) dealt with future designations and, unless it retained the limited retrospective effect previously described, it would become entirely ineffective. The legislative intent, the Court concluded, was to eliminate all benefits created by the 1948 Act—while preserving those arising from the 1939 Act—once a notification under clause (d) was issued.
In the matter reported in Metichand Shah, (1962) 2 S.C.R. 59, the Court addressed two appeals, numbered 282 and 283 of 1959, which were granted special leave to be heard. Both appeals arose from a single judgment and decree dated 18 December 1956 issued by the Bombay High Court at Bombay in the Second Appeals numbered 233 and 185 of 1955 respectively. Counsel for the appellants, consisting of G. S. Pathak, O. C. Mathur, J. B. Dadachanji and Ravinder Narain, represented the plaintiff‑landlords, while counsel for the respondents, identified as S. G. Patwardhan and K. R. Choudhri, acted for the tenant‑in‑possession parties. The judgment was delivered on 2 May 1962 by Chief Justice Sinha, who noted that the two appeals, though filed separately, raised a common question of law and therefore were heard together, with the resulting judgment applying to both cases.
The factual backdrop involved lands that had originally been situated in the former State of Baroda before its merger into the State of Bombay. The Bombay Tenancy and Agricultural Lands Act, referred to as the Act and designated as Bombay Act LXVII of 1948, was extended to the Baroda region on 1 August 1949. The plaintiffs instituted suits for possession of the lands on the ground that the tenants‑respondents had become trespassers after a notice served in March 1950, which was to take effect from the commencement of the new agricultural season in May 1951. Because the tenants did not comply with the notice and continued to occupy the lands, the landlords proceeded with civil suits seeking possession. The trial courts and the Court of Appeal both decreed in favour of the landlords, granting possession. However, on a second appeal filed by the tenants, the learned Single Judge of the High Court reversed those decisions, allowing the appeals and dismissing the possession suits, ordering costs throughout.
The parties did not dispute that if the provisions of the Act applied to the tenancies, the landlords’ suits would be untenable, as civil courts possess jurisdiction to try possession actions only when the occupiers are trespassers. Conversely, if the tenants were able to invoke the Act’s protections, any action for possession would have to be instituted in the Revenue Courts, not the civil courts. The landlords relied upon a notification issued by the Bombay Government on 24 April 1951, which stated: “In exercise of the powers conferred by clause (d) of sub‑section (1) of Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay LXVII of 1948) the Government of Bombay is pleased to specify the area within the limits of the Municipal Borough of Baroda City and within a distance of two miles of the limits of the said Borough, as being reserved for urban, non‑agricultural or industrial development.” The learned High Court Judge, disagreeing with the lower courts, held that under section 3A(1) of the Bombay Tenancy Act, 1939, as amended, a tenant would be deemed a protected tenant from 1 August 1950, and that this vested right could not be extinguished by the aforementioned notification issued under section 88(1)(d), which purported to place the lands outside the operation of the Act. In essence, the judge concluded that the notification possessed no retrospective effect capable of removing the protection afforded to tenants by section 3A. The appellants’ counsel contended that the notification, issued under section 88(1)(d), took effect from 28 December 1948—the date the Act commenced. To support this argument, they relied on the decision of this Court delivered by the same judge in the case of Sakharam v. Manikchand Motichand Shah, wherein it was stated that “The provisions of section 88 are entirely prospective. They apply to lands of the description contained in clauses (a) to (d) of section …”
In this case the learned Judge of the High Court held that, under the Bombay Tenancy Act of 1939 as amended, a person who became a tenant on or after 1 August 1950 was to be deemed a protected tenant. The judge explained that the protection granted by Section 3A(1) could not be taken away by the government notification issued under clause (d) of Section 88(1), which had the effect of removing the lands in dispute from the operation of the Act. Accordingly, the judge concluded that the notification possessed no retrospective effect and therefore could not deprive the tenants of the protection that Section 3A(1) conferred upon them.
The counsel for the appellants argued that the same notification, issued under clause (d) of Section 88(1), should be treated as having taken effect from 28 December 1948, the date on which the Act came into force. To support this position the counsel relied upon a previous judgment of this Court by Justice Sakharam in the matter of Sakharam v. Manikchand Motichand Shah. In that judgment the Court had observed that the provisions of Section 88 are entirely prospective, applying to lands described in clauses (a) to (d) of Section 88(1) from the date the Act became operative, namely 28 December 1948, and that they were not intended to be confiscatory or to strip away rights already acquired by tenants who had become protected. The counsel noted, however, that the earlier case concerned only clause (c) of Section 88(1), which deals with areas within certain municipal limits, and that clause (d) was mistakenly mentioned in the earlier report. The full text of Section 88(1) was then set out: clause (a) excludes lands leased from the Government, a local authority or a cooperative society; clause (b) excludes lands leased for industrial or commercial purposes; clause (c) excludes any area within the limits of Greater Bombay and the municipal boroughs of Poona City, Suburban Ahmedabad, Sholapur, Surat and Hubli and within two miles of those boroughs; and clause (d) empowers the State Government, by notification in the Official Gazette, to designate any area as reserved for urban non‑agricultural or industrial development. The counsel further explained that while clauses (a) to (c) apply to the situation as it existed on the date of enactment, clause (d) authorises the State Government to make future reservations, and thus its operation depends upon a subsequent notification. The judge’s reference to the earlier decision therefore indicated that the provisions of Section 88 were never meant to divest vested interests, a point that was unfavorable to the appellants.
In interpreting clause (d) of section 88(1), the Court observed that the clause could be brought into force only by a notification issued in the Official Gazette from time to time. Unlike clauses (a) to (c), which were expressly limited to the lands identified at the time the Act commenced, clause (d) referred to future circumstances. Consequently, the State Government possessed the authority to remove from the operation of the Act any area that it deemed should be classified as urban non‑agricultural or destined for industrial development, but such removal could occur only after a formal notification was issued. The Court therefore concluded that clause (d) became operative solely upon the issuance of the relevant notification. The portion of the judgment earlier quoted made clear that the provisions of section 88 were never intended to divest vested interests. In that sense, the Court’s decision was contrary to the appellants’ position. The appellants could not rely on a mere drafting slip concerning clause (d), which had been added to the other clauses of section 88(1), because that clause was not meant to be considered in relation to the controversy in the present case. In other words, the Court had never intended, in Sakharam’s case, to hold that the provisions of clause (d) of section 88(1) were purely prospective and had no retrospective effect.
The Court distinguished clause (d) from clauses (a), (b) and (c), which it held to be clearly prospective. Clause (d), in the context of the statute, would have a limited retrospective operation in that it would apply to land that could later be covered by a notification issued by the Government, thereby taking such land out of the operation of the 1948 Act and granting it protection. While the Act of 1948 would not apply at all to lands covered by clauses (a), (b) and (c), that exclusion did not remove the rights conferred by the earlier 1939 Act, which the 1948 Act repealed. This preservation of existing rights was expressly provided in section 89(2). Sakharam’s case concerned the effect of clause (c) on the rights existing under the 1939 Act, and in that connection the Court observed that section 88 was prospective. Clause (d), however, dealt with future developments; unless it possessed the limited retrospective effect previously indicated, it would be rendered wholly ineffective. The legislature’s intention was evidently to withdraw all benefits arising under the 1948 Act—while leaving intact those arising under the 1939 Act—once a notification under clause (d) was made. This approach reconciled the tenant benefits granted by the 1948 Act with the purpose of clause (d) to promote urban and industrial development. Accordingly, the observations of the High Court to the contrary were deemed incorrect, although the matter did not conclude there.
The discussion did not end with the earlier observations. On 24 April 1951 the State Government issued a notification under clause (d) of sub‑section (1) of Section 88 of the Bombay Tenancy and Agricultural Landis Act, 1948 (Bombay LXVII of 1948). This notification, identified as Revenue Department No 9361/49, was later cancelled by a second notification dated 12 January 1953, which read in full: “Revenue Department, Bombay Castle, 12th, January, 1953. Bombay Tenancy and Agricultural Landis Act, 1948. No.9361/49: In exercise of the powers conferred by clause (d) of sub‑section (1) of Section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay LXVII of 1948). The Government of Bombay is pleased to cancel Government Notification in the Revenue Department No 9361/49 dated the 24th/25th April, 1951.” Consequently, while the appeal was still pending before the Court of Appeal, the lower appellate court rendered its judgment on 27 September 1954, after the cancellation notice had been issued. The suit therefore had to be adjudicated on the premise that no effective notification under s.88(1)(d) existed at that time, and consequently the disputed lands could not be placed outside the operation of the Act. The matter was brought before the learned Assistant Judge, who observed that although the defendants had obtained the protection of the Act following the merger of Baroda with Bombay in 1949, that protection was removed by the first notification and subsequently nullified by the second cancellation. The Assistant Judge held that, despite the appellate court’s authority to consider later events, the suit should be decided based on the factual situation existing on the date the suit was filed, not on facts that arose during the pendency of the appeal. Accordingly, the learned Appellate Court concluded that the tenant‑defendants could not rely on the provisions of the Act and therefore could not resist the plaintiff’s suit for possession. In our view, that conclusion misinterpreted the legal position. At the time the lower appellate court’s judgment was delivered, the factual and legal circumstances were such that no notification under clause (d) of s.88(1) was in force, and therefore the land in question remained subject to the benefits granted by the Tenancy Law. Accordingly, the tenants could invoke the law’s protection against eviction on the ground that their lease term had expired. The appellants, however, argued that the later cancellation could not strip away rights that had accrued to them under the first notification. We find that argument untenable. Even if the landlords had obtained a final decree for eviction, that decree could not be reopened or its execution recalled merely because the decree had become final. Yet the second notification, which cancelled the first, was issued while the suit was still pending at the appellate stage. Thus, the court was bound to apply the law as it stood at the time of its judgment, recognizing that no protective notification existed and that the tenants were entitled to the statutory safeguards against eviction.
On the date the judgment was delivered, the Court concluded that there was no possibility of depriving the landlords of any rights that had already become vested in them. The record does not show that the second notification, which cancelled the earlier notification, was ever placed before the learned Single Judge who had heard and decided the second appeal in the High Court. In fact, the material placed before that Judge contains no reference to the later notification at all. Nevertheless, the Court believes that the learned Judge reached the correct ultimate result when he held that the tenants could not be lawfully evicted, even though the reasons he gave for that holding were not the proper ones. Accordingly, the appeals filed by the landlords were dismissed. However, no order as to costs was made against the respondents, because the respondents themselves had failed to bring the existence of the second notification, which cancelled the first, to the explicit attention of the High Court. In view of that omission, the Court ordered that the appeal be dismissed without any costs being awarded.