The Collector Of South Satara and Anr vs Laxman Mahadev Deshpande and Ors

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

Court: supreme-court

Case Number: Civil Appeal No. 289 of 1961

Decision Date: 13 February, 1963

Coram: J.C. Shah, P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah, K.C. Das Gupta

In this matter the Supreme Court recorded that the petition was filed by the Collector of South Satara and another party against Laxman Mahadev Deshpande and others, with the judgment delivered on 13 February 1963. The bench consisted of Justices J.C. Shah, P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah and K.C. Das Gupta. The citation of the decision is reported as 1964 AIR 326 and 1964 SCR (2) 48, with subsequent citator references R 1973 SC 190 (3), R 1980 SC 1759 (3) and E&R 1982 SC 887 (29). The statutory provisions discussed include the Bombay Hereditary Offices Act, 1874 (III of 1874), sections 4, 15(1)‑(2), clause (3), 22, and the Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950 (Bombay LX of 1950), sections 3, 4, 6 and 9(1)‑(4).

The headnote set out that after the abolition of his watan the respondent applied to the Collector for compensation under section 9 of the 1950 Act for the extinction of his right in the watan land and his “right to enjoy part of the land revenue.” The Collector rejected the application and the Revenue Tribunal affirmed that rejection. The High Court, hearing a petition under article 227 of the Constitution, set aside the Collector’s order and directed him to assess and pay compensation to the respondent pursuant to section 9(1) of the Act. The Court then examined the nature of watan property, holding that such property, together with the hereditary ice and the rights and privileges attached, constitutes a watan. A hereditary ice does not cease to be a watan merely because the service originally attached to it is no longer demanded. Commutation of service, in the absence of an express agreement to that effect, does not alter the tenure of land held as watan. The State may, by agreement, relieve the holder and his successors of the duty to perform the service for which the grant was made, but the ice and the grant continue in accordance with the terms of the settlement under section 15 of the Bombay Hereditary Offices Act, 1874. The Court referred to the decisions in Appaji Bapuji v. Keshav Shamrav (1890) 1 L.R. 15 Bom. 13 and Bachharam Datta Patil v. Viswanath Pundalik Patil, [1956] S.C.R. 675.

Further, the Court held that after a commutation settlement the holder, although relieved of the service obligation, retains the ice of watandar in name only, while the land granted as watan remains subject to the restrictions imposed by the Watan Act. By regranting the land in occupancy right on abolition or extinction of the watan, the holder is not prejudicially affected. Loss of watan rights in land, and the watan ice, is compensated by the regrant of occupancy rights in the land. Compensation for abolition, extinction or modification of rights other than those of a watandar was contemplated under sub‑section (2) of section 9 of the Bombay Paragana and Kulkarni Watans (Abolition) Act.

Compensation for the loss of a watan right was provided through the regrant of occupancy rights in the same land. The legislation contemplated such compensation under subsection (2) of section 9 of the Bombay Paragana and Kulkarni Watans (Abolition) Act, which authorized compensation when rights other than those of a watandar were abolished, extinguished, or modified, either by granting land, providing a cash allowance, or remitting land revenue. The matter before the Court arose in Civil Appeal No. 289 of 1961, filed by special leave against the judgment and order dated 6 February 1959 of the Bombay High Court in Special Civil Appeal No. 2647 of 1958. The appellants were represented by counsel for the Government of India, while respondent No. 1 was represented by counsel for the opposing side. The judgment was delivered on 13 February 1963 by Justice Shah.

With the benefit of special leave, the Collector of South Satara challenged the order of the Bombay High Court that had directed him to assess compensation payable to the respondent under section 9(1) of the Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950. The respondent, identified as Laxman Mahadev Deshpande, held Paragana Watan land identified as Survey Numbers 503/2 and 504/1 in Mouza Aitwade, Taluka Valve, District South Satara. The service obligations attached to that watan had been commuted around 1864 under a settlement commonly called the “Gordon Settlement,” whereby the holder, upon agreeing to pay a fixed sum, was relieved of the duty to serve as a Village Officer.

The State Legislature had enacted the Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950 (Act LX), which abolished all Paragana and Kulkarni Watans. The respondent sought compensation under section 9 of that Act, claiming Rs 10,479‑2‑8 for the extinction of his right in the watan land and for the loss of his “right to enjoy part of the land revenue.” The Collector, by an order dated 29 April 1957, rejected the claim, a decision that was upheld by the Bombay Revenue Tribunal on appeal under section 9(4) of the Act.

Subsequently, the respondent approached the High Court of Bombay under Article 227 of the Constitution. The High Court set aside the Collector’s order and directed the Collector to assess and pay compensation to the respondent in accordance with section 9(1) of the Abolition Act. The land in dispute had originally been granted to an ancestor of the respondent in the sixteenth century as remuneration for the performance of Paragana service by the ruler of Satara, and the grant had later been confirmed by the British Government. Although the original grant and its confirming sanad were not produced, both parties agreed that the grant conveyed ownership of the soil itself rather than merely a share of royal revenue. In determining the respondent’s claim for compensation under section 9 of the Bombay Paragana and Kulkarni Watans (Abolition) Act, the Court found it necessary in the

In the first instance the Court had to determine the true nature of the rights of a watandar in land that had been given as remuneration for the performance of service and to assess the effect of a commutation settlement, doing so in the light of the material provisions of the Bombay Hereditary Ices Act, III of 1874, which is commonly known as the Watan Act. Section 4 of the Watan Act defines “Watan property” as movable or immovable property that is held, acquired or assigned for providing remuneration for the performance of the duty attached to a hereditary ice. The Act further defines “Hereditary ice” as every ice held hereditarily for the performance of duties connected with the administration or collection of public revenue, with the village police, with the settlement of boundaries, or with other matters of civil administration, and it states that the expression also includes such ice even where the services originally attached to it have ceased to be demanded. Accordingly, the watan property, if any, together with the hereditary ice and the rights and privileges attached to them, constitute the watan. The expression “watandar” is explained as a person having a hereditary interest in a watan; it includes a person who held watan property before the introduction of the British Government into the locality of the watan, a person who acquired such property lawfully after such introduction, and a person who holds the property by inheritance. Section 15 of the Act provides for the commutation of service. Sub‑section (1) states that the Collector may, with the written consent of the holder of a watan, relieve the holder, his heirs and his successors in perpetuity from their liability to perform service, on such conditions as may be agreed between the Collector and the holder, whether or not those conditions are consistent with the provisions of the Act. Sub‑section (2), which was later repealed by Act XVI of 1895, had provided that any settlement made for this purpose before the Act came into force by any Collector or other officer acting on behalf of the Government with the holder of any watan would have the same force as if made under the Act. Sub‑section (3) provides that every settlement made or confirmed under this section shall be binding upon both the State Government and the holder of the watan and his heirs and successors. From these provisions it is clear that the watan property, if any, together with the hereditary ice and the rights and privileges attached, form a watan, and that a hereditary ice does not lose its character merely because the original service is no longer demanded. Consequently, in the absence of an express agreement to the contrary, the commutation of service does not alter the tenure of the land held as a watan. By agreement, the State may, for consideration, relieve the holder of the ice and his successors of the duty to perform the service for which the grant was made, but the ice and the grant continue, subject to the terms of the settlement made under section 15 of the Bombay Hereditary Ices Act, 1874.

The Court examined the settlement made under section fifteen of the Bombay Hereditary Ices Act, 1874, and referred to the earlier decision in Appaji Bapuji v. Keshav Shamrav (1890) I.L.R. 15 Bombay 13. In that case the Bombay High Court was asked to determine the nature of the tenure of land that had originally been held as watan land after the service to which it was originally attached had been commuted. The then Chief Justice, Sargent, observed at page twenty‑three that the so‑called Gordon Settlement was an arrangement entered into in 1864 by a Committee chaired by Mr Gordon, who was then the Collector. Acting on behalf of the Government, the Committee negotiated with the vatandars of the Southern Maratha Country and permanently relieved certain vatandars from the obligation to perform the services attached to their hereditary ices, in return for a quit‑rent, known as a judi, charged on the vatan lands. The reports of Mr Gordon’s Committee on the Satara and Poona districts and the correspondence of that Committee with the Government, the Court held, leave no doubt that, unless a particular settlement expressly provided otherwise, the settlements were not intended to convert the vatan lands into fully alienable private property of the vatandars. Rather, the settlements were intended to keep the lands attached to the hereditary ices, which, although freed from the requirement of service, remained intact as defined in the declaratory Act III of 1874. The Court further noted that a commutation settlement does not grant an indefeasible title to the grantee, because the right affirmed by the settlement under section fifteen, clause three, of the Watan Act may be lost through lapse, confiscation or resumption as provided in section twenty‑two of that Act. The State, having originally created the watan, retains the authority to terminate the watan, that is, to cancel the watan and to resume the grant, a principle affirmed in Bachharam Datta Patil v. Vishwanath Pundalik Patil. Consequently, where only a commutation of service has occurred, the watan ice ordinarily survives without the liability to perform service, and the character of the watan property continues to be attached to the grant. Nevertheless, the State Government possesses the power to abolish the ice and to release the property from its status as watan property. In light of these attributes of the watan and the property granted for the remuneration of the watandar, the Court held that the provisions of the Bombay Paragana and Kulkarni Watans (Abolition) Act must be applied when adjudicating the respondent’s claim for compensation upon abolition of his watan. Section three of the Abolition Act provides, inter alia, that with effect from the appointed day, notwithstanding any law, usage, settlement, grant, sanad or order, (1) all Paragana and Kulkarni watans shall be deemed abolished; (2) all rights to hold ice and any liability to render service pertaining to those watans are extinguished; and (3) subject to section four, all watan land is hereby...

Section 3 of the Bombay Paragana and Kulkarni Watans (Abolition) Act provided that, with effect from the appointed day, all watan land was to be resumed and treated as land liable to pay revenue under the provisions of the Code and the rules made thereunder, as if it were un‑alienated land. The provision further stipulated that such resumption would not disturb the validity of any alienation of the watan land that had been made in accordance with section 5 of the Watan Act, nor would it affect the rights of any alien or any person claiming through that alien. In addition, section 3 declared that every incident attached to the watans was extinguished.

The substantive part of section 4 declared that any watan land resumed under the Act would be re‑granted to the holder of the corresponding watan upon payment of an occupancy price equal to twelve times the amount of the full assessment of that land. The holder, after paying the occupancy price, would be deemed an occupant within the meaning of the Code with respect to that land. The section further provided that all the provisions of the Code and the rules relating to un‑alienated land would, subject to the provisions of the Act, apply to the re‑granted land. Section 6 created a right to compensation in lieu of a cash allowance or land revenue. It stated that, notwithstanding any law, usage, settlement, grant, sanad or order, a sum equal to seven times the cash allowance due to a holder on the appointed day of a watan, where a commutation settlement had been effected, would be paid to that holder. The same section added that where the watan property consisted of the whole or part of the land revenue of any land or village, a sum equal to ten times the amount of such land revenue would be paid to the holder. Section 9 dealt with the assessment and payment of compensation for the abolition, extinction or modification of rights in property that were not otherwise provided for in the Act. Sub‑section (1) allowed any person who felt aggrieved by the abolition, extinguishment or modification of his rights or interest in property, and for whom the Act did not provide compensation, to apply to the Collector for compensation. Sub‑section (2) prescribed the procedure for making such an application, while sub‑section (3) barred the grant of compensation on the ground that any watan land that had been wholly or partially exempt from the payment of land revenue was, by operation of the Act, now subject to full assessment. From the scheme of section 6, it was clear that if the remuneration of the Watandar consisted solely of a cash allowance, or part or whole of the land revenue, the compensation provisions applied accordingly.

The Court observed that when a watan is abolished, the holder is entitled to compensation calculated at the rate prescribed in the statute. If the remuneration for the watan consists not of a cash allowance or a remission of land revenue but of the land itself, the combined operation of sections 3(3) and 4 entitles the holder of the watan land to be re‑granted occupancy rights on the same footing as those enjoyed over unalienated land. Section 9 of the Act, the Court explained, provides a right to compensation for any abolition, extinguishment or modification of a right or interest in watan property, but only in those cases where the Act contains no other specific provision for compensation. The Court noted that there was no genuine dispute about this principle of law. However, two points of controversy remained between the parties. The first issue was whether the right to, or interest in, the property of a watandar is abolished, extinguished or modified by the provisions of the Bombay Paragana and Kulkarni Watans (Abolition) Act. The second issue was whether the Act contains any provision for compensation for such abolition, extinguishment or modification that would bar the operation of section 9(1). The Court found that the first issue presented little difficulty. Section 3, in its terms, provides for the abolition of the watan, the extinction of the ice and the modification of the right in which the land is held. These consequences arise by operation of section 3 itself and not by an exercise of the State’s executive power of confiscation or resumption. While the power of resumption of a watan may be exercised under section 22 of the Watan Act and such a resumption could destroy the holder’s rights to both the ice and the watan land, the Court held that in the absence of any statutory provision to that effect, no right to compensation would arise. Consequently, where the abolition of the watan is effected not by executive action but by legislative decree, its consequences must be determined by the statute that effectuates the abolition.

On the second question, the Court noted that the respondent reiterated the contention advanced before the High Court that when the grant to a watandar consists of the soil itself rather than merely a cash allowance or remission of land revenue as remuneration for performance of the duties attached to his ice, compensation must be awarded under section 9. The respondent further argued that Act LX of 1950 makes no provision for payment of compensation to a watandar for the abolition of his ice and his rights in the land he holds. The appellant challenged this view. The Court reminded that the State Government has always possessed, by the clear implication of section 22 of the Bombay Hereditary Ices Act, 1874, the power of resumption, and that this power is statutorily enforced by section 3 in respect of the Paragana and Kulkarni Watans. Although the State Government has the power to abolish a watan ice and to resume land granted as remuneration for the performance of duties attached to the ice, the Court held that such power does not by itself obligate the State to compensate the watandar for the extinction of his rights, unless a specific provision for compensation is found in the Act. Accordingly, the Court concluded that where no specific compensation provision exists, section 9 applies and entitlement to compensation arises.

In this case the Court observed that although the State Government possessed, under section 22 of the Bombay Hereditary ices Act, 1874 and the corresponding provisions of the Watan Act, the authority to abolish a watan and to resume the land granted as remuneration for the performance of the duties attached to the ice, that authority did not obligate the State to compensate the wandar for the extinction of his rights. The Legislature, however, as a matter of grace and apparently in recognition of settlements such as those under the Gordon Settlement, introduced section 6 to provide cash compensation for the loss of a right to a cash allowance or remission of land revenue, and enacted section 4 to confer upon the holder of the watan land, for the loss of his right, a right to be re‑granted the land as an occupant free from the obligations imposed by its original tenure as watan land. Section 9 was also made applicable for awarding compensation to persons whose right or interest in property is abolished, extinguished or modified by virtue of the Act, where no other provision for compensation for such extinction, abolition or modification is contained in the Act. The Court explained that the entitlement to cash compensation under section 9 depends upon two conditions: first, the abolition, extinction or modification of rights in property by the provisions of the Act; and second, the absence of any other provision in the Act for compensation in that regard. Consequently, if section 4, which provides for the conferment of occupancy rights in land, is regarded as a provision of compensation for the abolition, extinction or modification of the right to hold the land as watan land, then the residual provision in section 9 would not, on its plain terms, be attracted.

By operation of section 3, all Paraganas and Kulkarni watans that fall within the scope of the Act are abolished, the right to hold the ice is extinguished, and the land granted as remuneration for performance of service is resumed. The holder of such land thereafter becomes liable to pay land revenue, but is entitled, upon payment of an occupancy price at the prescribed rate, to be re‑granted occupancy rights as if the land were un‑alienated. The Court held that this right, although not a right to cash compensation, constitutes a valuable right of occupancy in the land. Because the resumption of watan land and its regrant in the form of occupancy rights remove all the restrictions that were placed upon the holder of watan land by the provisions of the Watan Act and the terms of the original grant, the holder is no longer subject to the incidents of watan tenure, such as restrictions on alienation beyond the life‑time of the holder, special succession rules, and liability to confiscation or further resumption. The occupancy right conferred by section 4, therefore, adequately compensates the holder for the loss of the precarious interest of a watandar, since the land re‑granted after abolition of the watan is held subject only to the restrictions imposed by sub‑section (2) of section 4 and is freed from the traditional incidents of watan tenure. In the Court’s judgment, compensation contemplated as a matter of grace is not limited to monetary payment; it also includes the grant of occupancy rights, which together compensate for the loss of the ice and the interest of a watandar in the land.

In this case the Court observed that the loss suffered by a watandar when the watan was abolished and the rights in watan land were extinguished was addressed by section 4 of the statute, which conferred upon the affected person a right of occupancy in the land. The Court explained that this occupancy right could properly be regarded as compensation for the abolition of the watandar’s former rights. The Court further held that the imposition of a nominal occupancy price would not diminish the compensatory character of the occupancy right. After the commutation settlement, the holder was released from any obligation to render service; consequently, the title of watandar survived only in name, while the land that had been granted as walan remained subject to the restrictions imposed by the Watan Act. By re‑granting the land in occupancy right on the abolition or extinction of the watan, the Court found that the holder was not in truth prejudicially affected, because the loss of watan rights and the associated interest were compensated by the occupancy right. Accordingly, the Court inferred that the Legislature intended to provide compensation under sub‑section (2) of section 9 for the abolition, extinction or modification of rights other than the watandar’s right to land, cash allowance, or remission of land revenue. The Court therefore allowed the appeal and set aside the order passed by the High Court. The Court noted that the respondent had not claimed a right of occupancy in the land that he previously held as watan land, and it declined to express any opinion on whether he would be entitled to such a grant in view of his failure to make a claim. Finally, the Court directed that there would be no order as to costs throughout and confirmed that the appeal was allowed.