HARDEV SINGH versus PRESCRIBED AUTHORITY, KASHIPUR & ANR. on 10 January 2022

[2022] 1 S.C.R. 197

HARDEV SINGH

v.

PRESCRIBED AUTHORITY, KASHIPUR & ANR.

(Civil Appeal No. 2295 of 2010)

JANUARY 10, 2022

[S. ABDUL NAZEER AND KRISHNA MURARI, JJ.]

Uttar Pradesh Imposition of Ceiling on Land Holdings Act,1960: Object of legislation – Held: The object of the 1960 Act is toprescribe a ceiling limit on the area of land held by a ‘tenure holder’for the purpose of securing the interest of the community at large toensure increased agricultural production and to provide land forlandless agricultural labourers with a view to have equitabledistribution of land–Land laws.

Uttar Pradesh Imposition of Ceiling on Land Holdings Act,1960: ss.3(9) and 3(17)–Prescribed Authority declared certain landof government lessee-respondent no.2 as surplus – Land declaredsurplus included the land sublet to the appellant (sub-lessee) bygovernment lessee – Aggrieved appellant unsuccessfullyapproached the authorities – Writ petition also was dismissed byHigh Court – On appeal, held: The lease in favour of RespondentNo. 2 was made under the Government Grants Act, 1895 –Respondent No. 2 was put in possession of the land under the termsand conditions of the Government grant which did not permit anytransfer of land by him without fulfilling the conditions prescribedin Clause 9 – The conditions of grant though allowed sub-lease foragricultural purpose but sub-lessees cannot claim independenttenancy rights contrary to terms of grant – Thus, the appellant beinga sub-lessee continues to be an ostensible holder of land and thegovernment grantee, respondent No. 2, to be the real holder – Theceiling authorities as well as the High Court rightly dismissed theclaim of the appellant.

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198SUPREME COURT REPORTS

[2022] 1 S.C.R.

ADismissing the appeal, the Court

HELD: 1. The very purpose behind enactment of theCeiling Act is to prescribe a ceiling limit on the area of land heldby a ‘tenure holder’ for the purpose of securing the interest ofthe community at large to ensure increased agriculturalBproduction and to provide land for landless agricultural labourerswith a view to have equitable distribution of land. [Para 18][203-G-H]

The terms of the grant go to show that 4805 acres of landsituated in Pargana Bazpur, District Nainital were leased out toCthe Government Lessee. Condition No. 9 of the Grant lays downthe conditions to be fulfillled in the event of lessee transferringthe lease land or a portion thereto except transfer by way of aninheritance. Conditions laid down by Clause 9 of the grant wasmade inapplicable in case of sub-leases made by the lessee whilesub-letting the land in the ordinary course of agriculture. A perusalDof Condition no. 1 of the Grant made it clear that the grantee wasonly allowed to transfer the land on fulfillment of conditionsenumerated in the said clause. Furthermore, even the terms ofthe sub-lease specifically provided that if the sub-lessee intendedto purchase the full rights of the Government Lessee therebyEhimself acquiring the status of an independent tenure holder, hecould do so in confirmity with Clause 9 of the Government leasewithin a period of five years from the date of sub- lease on thepayment of rent so fixed. [Paras 21, 22, 23, 24][208-H; 209-A-B,E-G]FConjoint reading of Clause 5 of the sub-lease and Clause 9of the Government lease clearly stipulated that acquisition ofrights, if any, as independent tenure holder could only be byfollowing the stipulations as contained in Clause 5 of the sub-lease and Clause 9 of the Government lease, which, in the instantcase, admittedly, was not followed. An analysis of the terms andGconditions of grant makes it clear that any transfer of land by theGovernment Lessee was subject to fulfilment of the conditionsof the government lease and sub-lease and non-compliance ofthe conditions and transfer made without fulfilling the conditionswould be void. Though, the conditions of grant allowed sub-leaseHof the land in the ordinary course of agriculture but contrary to the terms of grant, the sub-lessee can claim no independenttenancy right so as to frustrate the terms and tenure of the grant,as the sub-lease executed for ordinary course of agriculture cannotbe treated as transfer for want of compliance of the conditionsenumerated in the Clause itself. Thus, the appellants in theircapacity as sub-lessee shall not acquire the status of anindependent tenure holder. [Para 26][210-B-F]

Admittedly, the lease in favour of Respondent No. 2 wasmade under the Government Grants Act, 1895. Respondent No.2 was put in possession of the land under the terms and conditionsof the Government grant which did not permit any transfer ofland by him without fulfilling the conditions prescribed in Clause9. The conditions of grant though allowed sub-lease foragricultural purpose but sub-lessees cannot claim independenttenancy rights contrary to terms of grant. [Para 27][210-F-G]

Escorts Farms Ltd., Previously Known As M/s. EscortsFarms (Ramgarh) Ltd. v. The Commissioner, KumaonDivision, Nainital, U.P. And Ors. (2004) 4 SCC 281 :[2004] 2 SCR 543 – relied on.

Case Law Reference

[2004] 2 SCR 543relied onPara 29

CIVIL APPELLATE JURISDICTION: Civil Appeal No.2295 of2010.

From the Judgment and Order dated 20.08.2008 of the High Courtof Uttarakhand at Nainital in Writ Petition (M/S) No.488 of 2007.

With

Civil Appeal No. 2296 of 2010.

S. R. Singh, Sr. Adv., Nagendra Singh, Dr. Amardeep Gaur forM/s V. Maheshwari & Co., Vishwa Pal Singh, Advs. for the Appellant.

Tanmaya Agarwal, Jatinder Kumar Bhatia, Wrick Chatterjee,Advs. for the Respondents.

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AThe Judgment of the Court was delivered by KRISHNA MURARI, J.

These appeals are directed against the common judgment andorder dated 20.08.2008 passed by the High Court of Uttarakhand atNainital (hereinafter referred to as ‘High Court’) dismissing the twoBWrit Petitions based on identical facts raising common questions of law,filed by the appellants herein. Writ petitions arose out of proceedingsunder the Uttar Pradesh Imposition of Ceiling on Land Holdings Act,1960 (hereinafter referred to as ‘Act of 1960’).

FactsC

2. The factual matrix of two Civil Appeals being identical, referenceis being made to the facts of Civil Appeal No. 2295 of 2010 which are asunder:- The Secretary of State for India executed a lease deed datedD25.08.1920 under the Government Grants Act, 1895 (Act No. 15 of1895) in favour of one Lala Khushi Ram. On demise of Lala KhushiRam, the lease hold rights were inhereted by ‘Harikishan Lal’, RespondentNo. 2 herein, as a successor. He executed a registered sub-lease foragricultural purposes of an area measuring 2.49 acres in favour of theAppellants herein.E

3. The Prescribed Authority, Kashipur (Respodent No.1 herein),issued a notice under Section 10(2) of the Act of 1960 to RespondentNo. 2 herein, the Government Lessee, proposing to declare certain areaof land held by him as surplus.

4. Vide order dated 28.07.1978, respondent no.1 declared the landFmeasuring 2 Bigha 16 Biswa of Khasra No. 254, 1 Bigha 11 Biswa ofKhasra No. 255, 8 Bigha 16 Biswa of Khasra No. 256 and 2 Bigha 16Biswa of Khasra No. 257, total admeasuring 15 Bigha, 16 Biswa assurplus land in the hands of the Government Lessee. The land declaredsurplus included the land sub-let to the appellant by Respondent No. 2,Gthe Government Lessee.

5. On attaining knowledge of the fact that the land sub-let to himwas included in the land declared surplus in the hands of GovernmentLessee, the appellant made an application under Section 11(2) of theAct of 1960, which came to be dismissed by Respondent No.1 on theHground that the appellant has no locus to maintain the said application.

The appellant challenged the order by filing Writ Petition No. 9048 of1979 which was allowed and the matter was remanded back to thePrescribed Authority to decide the objections filed by the appellant underSection 11(2) of the Act of 1960.

6. After remand, the Prescribed Authority again dismissed theapplication vide order dated 12.04.1982 mainly on following two grounds:-

(i) Possession of the appellant over the land in question is notreflected in the revenue records.

(ii) The conditions postulated in Clause 9 of the lease deed fortransfer of land or portion thereof by the Government Lesseewere not followed before creating a sub-lease in favour ofappellant.

7. The aforesaid order was challenged by the appellant by way ofCeiling Appeal before the Additional District Judge, which also came tobe dismissed vide order dated 27. 08. 1984. Consequently, the appellantapproached the High Court of Judicature at Allahabad by filing CivilMiscellaneous Writ Petition No. 14911/1984.

8. During the pendency of the Writ Petition before the High Courtof Judicature at Allahabad, State of Uttaranchal came into existenceand since the land in question fell within the territorial jurisdiction of thenewly created High Court for Uttaranchal, the Writ Petition came to betransferred there and eventually got dismissed for want of prosecution.Restoration application made by the appellant for recall of the order toowas dismissed and the appellant approached this Court by way of SpecialLeave Petition, which came to be allowed and the Writ Petition wasrestored to its original number.

9. Vide Common impugned judgment and order dated 20.08.2008,the High Court dismissed the writ petitions.

10. The High Court in the impugned common order thoughobserved that the appellants herein being sub-lessees would be tenureholder as per sub-Section 9(3) of the Ceiling Act but refused to extendthe benefit to the appellant in view of violation of the conditions specifiedby Clause 9 of the Lease Deed.

11. We have heard Shri S.R.Singh, learned senior counsel for theappellants and Shri Tanmaya Agarwal, learned counsel for theRespondent-State of Uttarakhand.

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202SUPREME COURT REPORTS

AContentions made on behalf of the appellant

12. Learned counsel for the appellant referring to the definition ofthe term ‘tenure holder’ as contained in Section 3(17) of the Ceiling Actand the definition of ‘Holding’ contained in Section 3(9) of the said Actcontends that the appellant would attain the status of a ‘tenure holder’Bwithin the meaning of Section 3(17) of the Ceiling Act, and having acquiredthe status of independent tenure holder is entitled for independentassessment of ceiling area and the land falling in his tenure cannot beclubbed with holding in the hands of Respondent No. 2, the Governmentlessee.

C13. It was further submitted that the two fold prohibitory conditionscontained in Clause 9 of the lease deed, namely, (i) the lessee agrees inthe event of his transferring the lease land otherwise than by inheritancewould either pay to the Secretary of State 25 % of the price realised byhim, or (ii) relinquish to the Secretary of State 1/4th of the area proposedto be transferred are not applicable to sub-leases made by theDGovernment Lessee, when sub-letting the land in ordinary course ofagriculture as mentioned in Clause 9 itself. Referring to the sub-lease, itis contended that sub-lease was for agricultural purposes and for thecause of growing more food campaign and the High Court has patentlyerred in holding the sub-lease as void on the ground of non-complianceEof conditions enumerated in the first part of Clause 9 of the lease deedignoring the later part postulating an exemption from the twin conditionsfor sub-lease made for agriculture purposes.

Contentions made on behlaf of the Respondent

14. In reply, learned counsel for the respondent submitted that theFcase of the appellant having acquired the rights of independent tenureholder is based entirely on the definitions of ‘tenure holder’ and ‘holding’under Sections 3(17) and 3(9) of the Ceiling Act, without taking intoconsideration the provisions of Section 5 of the Ceiling Act which is thecharging section. It is further submitted that definitions being relied uponGby the counsel for the appellant cannot be viewed in isolation and are tobe read in consonance with Section 5 of the Ceiling Act which is thecharging section.

15. He further submitted that Section 5 of the Ceiling Act postulatesthat for determination of ceiling area, there exists a presumption containedHin Explanation (I) that all land held by a tenure holder would also include land ostensibly held in the name of any other person. He points out thatExplanation (II) clearly states that unless the contrary is proved to thesatisfaction of the prescribed authority, it is presumed that the firstmentioned person continues to hold the land ostensibly in the name ofany other person. Thus, burden of proof to disprove this presumption lieson the appellants to establish the claim that they are independent tenureholders. The appellants have failed to discharge the said burden andthus, their claim has rightly been negated.

16. Learned counsel for the Respondent No.2 further submittedthat Clause 9 of lease deed since specifically excludes sub-leases madein the ordinary course of agriculture, which clearly implies thatindependent tenure rights cannot be created by sub-leases made inordinary course of agriculture by the Government Lessee. Admittedly,since the appellants are sub-lessees under a sub-lease made foragricultural purposes and, therefore, by implication he is excluded fromacquiring any rights as independent tenure holder.

Issues Involved

17. Having perused the relevant facts and records and on ananalysis of rival contentions, the following issues arise for ourconsideration:-

(i) Whether the appellants who are sub-lessees, by implicationacquire the status of tenure holder in view of the definitionsof ‘holding’ contained in Section 3(9) of the Ceiling Act andthe ‘tenure holder’ in Section 3(17) of the Act?

(ii) Whether the Appellants being sub-lessee of the originalGovernment Lessee are merely ostensible tenure holdersof the land, while the Government lessees continued to bethe original holders i.e., the land in question is merely heldby the Appellants on behalf of the original lessees?

Our Analysis

18. The very purpose behind enactment of the Ceiling Act is toprescribe a ceiling limit on the area of land held by a ‘tenure holder’ forthe purpose of securing the interest of the community at large to ensureincreased agricultural production and to provide land for landlessagricultural labourers with a view to have equitable distribution of land.

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19. Before proceeding further it would be relevant to refer thedefinitions of ‘holding’ and ‘tenue holder’ as contained in Sections 3(9)and 3(17) and Section 5 of the Ceiling Act, which read as under :- “ Section 3 (9) :-

(9) “holding” means the land or lands held by a person as abhumidhar, sirdar, asami of Gaon Sabha or an asamimentioned in Section 11 of the Uttar Pradesh ZamindariAbolition and Land Reforms Act, 1950, or as a tenant underthe U.P. Tenancy Act, 1939, other than a sub-tenant, or as aGovernment lessee, or as a sub-lessee of a Government lessee,where the period of the sub-lease is co-extensive with theperiod of the lease;”

Section 3 (17) :-

“Tenure-Holder” means a person who is the holder of aholding but [except in Chapter III] does not include - (a) a woman whose husband is a tenure-holder; (b) a minor child whose father or mother is a tenure-holder; Section 5 :- Imposition of Ceiling. - (1) [On and from thecommencement of the Uttar Pradesh Imposition of Ceiling onLand Holdings (Amendment) Act, 1972], no tenure-holdershall be entitled to hold in the aggregate through-out UttarPradesh, any land in excess of the ceiling area applicable tohim.

[Explanation I. - In determining the ceiling area applicableto a tenure-holder, all land held by him in his own right,whether in his own name, or ostensibly in the name of anyother person, shall be taken into account.

Explanation II. - [If on or before January 24,1971, any landwas held by a person who continues to be in its actualcultivatory possession and the name of any other person isentered in the annual register after the said date] either inaddition to or to the exclusion of the former and whether onthe basis of a deed of transfer or licence or on the basis of adecree, it shall be presumed, unless the contrary is proved tothe satisfaction of the prescribed authority, that the first mentioned person continues to hold the land and that it is soheld by him ostensibly in the name of the second mentionedperson.]

(2) Nothing in sub-section (1), shall apply to land held by thefollowing classes of persons namely - (a) the Central Government, the State Government or anyLocal Authority or a Government Company or a Corporation; (b) a University;

(c) [an intermediate or degree college imparting educationin agriculture or a post-graduate college;]; (d) a banking company or a co-operative bank or a co-operative land development bank; (e) the Bhoodan Yagna Committee constituted under the U.P.Bhoodan Yagna Act, 1952.

(3) [Subject to the provisions of sub-sections (4), (5), (6) and(7)] the ceiling area for purposes of sub-section (1) shall be- (a) in the case of a tenure-holder having a family of not morethan five members, 7.30 hectares of irrigated land (includingland held by other members of his family) plus two additionalhectares of irrigated land or such additional land whichtogether with the land held by him aggregates to two hectares,for each of his adult sons, who are either not themselvestenure-holders or who hold less than two hectares of irrigatedland, subject to a maximum of six hectares of such additionalland; (b) in the case of a tenure-holder having family of more thanfive members, 7.30 hectares of irrigated land (including landheld by other members of his family), besides, each of themembers exceeding five and for each of his adult sons whoare not themselves tenure-holders or who hold less than twohectares of irrigated land, two additional hectares of irrigatedland or such additional land which together with the landheld by such adult son aggregates to two hectares, subject toa maximum of six hectares of such additional land; Explanation. - The expression ‘adult son’ in clauses (a) and(b) includes an adult son who is dead and has left surviving A

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behind him minor sons or minor daughters (other than marrieddaughters) who are not themselves tenure-holders or who holdland less than two hectares of irrigated land; A

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(e) in the case of any other tenure-holder, 7.30 hectares ofirrigated land; Explanation. - Any transfer or partition of land which is liableto be ignored under sub-sections (6) and (7) shall be ignoredalso - C

(f) for purposes of determining whether an adult son of atenure-holder is himself a tenure-holder within the meaningof [clause (a) or clause (b)]; (g) for purposes of service of notice under Section 9.

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(4) Where any holding is held by a firm or co-operative societyor association of persons (whether incorporated or not, butnot including a public company), its members (whether calledpartners, share-holders or by any other name) shall, forpurposes of this Act, be deemed to hold that holding inproportion to their respective shares in that firm, co-operativesociety or other society or association of persons :

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[Provided that where a person immediately before hisadmission to the firm, co-operative society, or other societyor association of persons, held no land or an area of landFless than the area proportionate to his aforesaid share thenhe shall be deemed to hold no share, or as the case may be,only the lesser area in that holding, and the entire or theremaining area of the holding, as the case may be, shall bedeemed to be held by the remaining members in proportion totheir respective shares in the firm, co-operative society orGother society or association of persons.]

(5) In respect of any holding held by any private trust, - (a) where the shares of its beneficiaries in the income fromsuch trust are known or determinable, the beneficiaries shall,for purposes of this Act, be deemed to have the shares in that H

holding in the same proportions as their respective shares inthe income from such trust, (b) in any other case, it shall be governed by [clause (e)] ofsubsection (3).

(6) In determining the ceiling area applicable to a tenure-holder, any transfer of land made after the twenty-fourth dayof January, 1971, which but for the transfer would have beendeclared surplus land under this Act, shall be ignored andnot taken into account; Provided that nothing in this sub-section shall apply to - (a) a transfer in favour of any person (including Government)referred to in sub-section (2); (b) a transfer proved to the satisfaction of the prescribedauthority to be in good faith and for adequate considerationand under an irrevocable instrument not being a benamitransaction or for immediate or deferred benefit of the tenure-holder or other members of his family.

[Explanation I. - For the purposes of this sub-section, theexpression transfer of land made after the twenty-fourth dayof January, 1971, includes -]

[(a) a declaration of a person as a co-tenure-holder madeafter the twenty-fourth day of January, 1971 in a suit orproceeding irrespective of whether such suit or proceedingwas pending on or was instituted after the twenty-fourth dayof January, 1971]; (b) any admission, acknowledgment, relinquishment ordeclaation in favour of a person to the like effect, made inany other deed or instrument or in any other manner.

Explanation II. - The burden of proving that a case falls withinclause (b) of the proviso shall rest with the party claiming itsbenefit.

(7) In determining the ceiling area applicable to a tenure-holder, any partition of land made after the twenty-fourthday of January, 1971, which but for the partition would havebeen declared surplus land under this Act shall be ignoredand not taken into account; A

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AProvided that nothing in this sub-section shall apply to - (a) [x x x]

(b) a partition of a holding made in a suit or a proceedingpending on the said date :Provided further thatnotwithstanding anything contained in the preceding provisothe prescribed authority, if it is of opinion that by collusionbetween the tenure-holder and any other party to the partition,such other party has been given a share which he was notentitled to, or a larger share than he was entitled to may ignoresuch partition.

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[Explanation I. - If a suit is instituted after the said date fordeclaration that a partition of land has taken place on orbefore the said date, then such declaration shall be ignoredand not be taken into account, and it shall be deemed that nopartition has taken place on or before the said date.]

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Explanation II. - The burden of proving that a case falls withinthe first proviso shall rest with the party claiming its benefit.

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[(8) Notwithstanding anything contained in sub-sections (6)and (7), no tenure-holder shall transfer any land held by himduring the continuance of proceedings for determination ofsurplus land in relation to such tenure-holder and everyEtransfer made in contravention of this sub-section shall bevoid.

Explanation. - For the purposes of this sub-section,proceedings for determination of surplus land shall be deemedto have commenced on the date of publication of notice underFsub-section (2) of Section 9 and shall be deemed to haveconcluded on the date when an order in relation to suchtenure-holder is passed under sub-section (1) of Section 11or under sub-section (1) of Section 12, or as the case may be,under Section 13.]”

G20. Appellants herein have contended that since they are the holderof a ‘holding’ by implication become ‘tenure holder’ as per combinedreading of Sections 3(9) and 3(17) of the Act.

21. The terms of the grant go to show that 4805 acres of landsituated in Pargana Bazpur, District Nainital, were leased out to theHGovernment Lessee.

22. Condition No. 9 of the Grant lays down the conditions to befulfillled in the event of lessee transferring the lease land or a portionthereto except transfer by way of an inheritance. Conditions laid downby Clause 9 of the grant has been made inapplicable in case of sub-leases made by the lessee while sub-letting the land in the ordinary courseof agriculture. For a ready reference, the provisions of Clause 9 of thegrant are reproduced hereunder :- “9. The lessee agrees in the event of his transferring otherthan by inheritance the leased land or portion thereof to eitherpay to the Secretary of State twenty five percent of the pricerealized by him by the transfer of lease rights or to relinquishto the Secretary of State 1/4 of the area proposed to betransferred.

The Deputy Commissioner shall have the power to chooseeither alternative. Any further transfer by the lessee or histransferee shall be subject to a similar payment of 1/4 of thecost price or a similar relinquishment of 1/4 of the landproposed to be transferred.

This clause shall not apply to leases made by the lessee whensubletting land in the ordinary course of agriculture.”

23. A perusal of the aforesaid provision makes it clear that thegrantee was only allowed to transfer the land on fulfillment of theconditions enumerated in the said clause.

24. Furthermore, even the terms of the sub-lease specificallyprovided that if the sub-lessee intends to purchase the full rights of theGovernment Lessee thereby himself acquiring the status of anindependent tenure holder, he could do so in confirmity with Clause 9 ofthe Government lease within a period of five years from the date of sub-lease on the payment of rent so fixed. Relevant Clause 5 of the sub-lease in this regard reads as under :- “That if the sub lessee intends to purchase the full rights ofthe lessee which he has obtained according to the indenturemade by the lessee’s predecessor-in-interest late Lala KhushiRam and the then Secretary of State for India in Council inconformity with clause nine of that indenture for the wholearea of 2.49 acres he shall be entitled to do so within five A

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years from 28.6.1966 on paying at the rate of Rs.150/- (Rupeesone hundred and fifty only) per acre to the lessee. The sublessee shall be liable to pay the annual rent of that currentyear during which he makes such a transaction during theperiod of five years from the commencement of this agreementas mentioned above.”

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25. Thus, a conjoint reading of Clause 5 of the sub-lease andClause 9 of the Government lease clearly stipulates that acquisition ofrights, if any, as independent tenure holder can only be by following thestipulations as contained in Clause 5 of the sub-lease and Clause 9 of theGovernment lease, which, in the present case, admittedly, has not beenCfollowed.

26. An analysis of the terms and conditions of grant makes itclear that any transfer of land by the Government Lessee was subject tofulfilment of the conditions of the government lease and sub-lease andnon-compliance of the conditions and transfer made without fulfillingDthe conditions would be void. Though, the conditions of grant allowedsub-lease of the land in the ordinary course of agriculture but contrary tothe terms of grant, the sub-lessee can claim no independent tenancyright so as to frustrate the terms and tenure of the grant, as the sub-lease executed for ordinary course of agriculture cannot be treated asEtransfer for want of compliance of the conditions enumerated in theClause itself. Thus, the appellants in their capacity as sub-lessee shallnot acquire the status of an independent tenure holder.

27. Admittedly, the lease in favour of Respondent No. 2 was madeunder the Government Grants Act, 1895. Respondent No. 2 was put inFpossession of the land under the terms and conditions of the Governmentgrant which did not permit any transfer of land by him without fulfillingthe conditions prescribed in Clause 9. The conditions of grant thoughallowed sub-lease for agricultural purpose but sub-lessees cannot claimindependent tenancy rights contrary to terms of grant. The terms andconditions of grant will have an overriding effect in view of amendmentGof Sections 2 & 3 of the Government Grants Act in its application toState of U.P. inserted by U.P. Amendment Act 13 of 1960 withretrospective effect. Section 2 of the Government Grants Act as applicablein State of U.P. reads as under :- H

HARDEV SINGH v. PRESCRIBED AUTHORITY, KASHIPUR[KRISHNA MURARI, J.]

STATE AMENDMENTS

Uttar Pradesh:

“2 (1). Transfer of Property Act, 1882, not to apply toGovernment Grants - Nothing contained in the Transfer ofProperty Act, 1882, shall apply or be deemed ever to haveapplied to any grant or other transfer of land or of any interesttherein, heretofore made or hereafter to be made, by or onbehalf of the government to or in favour of any personwhomsoever; and every such grant and transfer shall beconstrued and take effect as if the said Act had not beenpassed.

(2). UP Tenancy Act, 1939, and Agra Tenancy Act, 1926 notto affect certain leases made by or on behalf of theGovernment - Nothing contained in the UP Tenancy Act, 1939,or the Agra Tenancy Act, 1926, shall affect, or be deemed tohave ever affected any rights, created, conferred or granted,whether before or after the date of the passing of theGovernment Grants (UP Amendment) Act 1960, by leases ofland by, or on behalf of, the Government in favour of anyperson; and every such creation, conferment or grant shallbe construed and take effect notwithstanding anything to thecontrary contained in the UP Tenancy Act, 1939, or the AgraTenancy Act, 1926.

(3) Certain leases made by or on behalf of the Government totake effect according to their tenor - All provisions, restrictions,conditions and limitations contained in any such creation,conferment or grant referred to in Section 2, shall be validand take effect according to their tenor; any decree ordirection of a court of law or any rule of law, statute orenactment of the Legislature, to the contrary -notwithstanding:

Provided that nothing in this section shall prevent, or bedeemed ever to have prevented, the effect of any enactmentrelating to the acquisition of property, land reforms or theimposition of ceiling on agricultural lands.”

28. The aforesaid provisions as applicable in the State of U.P.with retrospective effect clearly provides that the rights and obligationsbetween the Government as lessor of the land and the grantee as lessee A

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Aof the land are to be regulated by the terms of the grant. The terms ofthe grant clearly postulates transfer of the land by Government Lesseesubject to fulfillment of certain conditions. A sub-lease created foragricultural purposes having been exempted from operation of theconditions and no vested right shall be created in sub-lease and he cannotclaim any rights contrary to the terms of the grant.B

29. Similar issue came up for consideration before this Court inthe case of Escorts Farms Ltd., Previously Known As M/S. EscortsFarms (Ramgarh) Ltd. Vs. The Commissioner, Kumaon Division,Nainital, U.P. And Ors.[1], and has been answered as under :- C“33. The Statement of Objects and Reasons for amendingSection 2 of the Govt. Grants Act, 1895 by UP AmendmentAct of 1960 makes it clear that the State Legislature intendedto apply only the provisions of Land Reforms Act and CeilingAct to the lands held by persons under the Govt. Grants Act.The statements of objects and reasons read thus:-D

“Provisions of Section 2 of the Government Grants (UPAmendment) Act, 1959, have the effect of saving a grant ofan agricultural lease by or on behalf of the Government fromthe operation not only on the Acts mentioned therein, but alsoof any other law, including the law for imposition of ceilingEon land holdings, that might be made in future. There is alsoan apprehension that the result of the wordings of section 2may be to undo the vesting of estates of government granteesunder section 4 of the UP Zamindari Abolition and LandReforms Act, 1950. With a view, therefore, to remove any suchFapprehension and to put the UP Imposition of Ceiling on LandHoldings Bill, 1959, when enacted, beyond the purview ofthe Government Grants Acts, this Bill is being introduced.Vide UP Gazette Extraordinary, dated February 3, 1960.”

34. Land Reforms Act, 1950 being saved by sub-section (3)Gof Section 2 of Govt. Grants Act is applicable to the govt.grants. Under Section 18 (l)(c) of Land Reforms Act, a govt.grantee holding land rent-free was allowed to retainpossession of the land as ‘Bhumidhar.’ Section 18 of the LandReforms Act with clause (c) in sub-section (1) reads thus:- “Section 18. Settlement of certain lands with intermediariesor cultivators as Bhumidar - (1) Subject to the provisions ofSections 10,15,16 and 17, all lands - (a) in possession of orheld or deemed to be held by an intermediary as sir, khudkashtor an intermediary” grove. (b) held as a grove by, or in thepersonal cultivation of a permanent lessee in Avadh. (c) heldby a fixed-rate tenant or a rent-free grantee as such, or (d)held as such by - i) an occupancy tenant, Possessing the ii) ahereditary tenant, right to transfer iii) a tenant on Patta theholding by sale Dawami or Istamrari referred to in Section17, (e) held by a grove holder.

On the dale immediately preceding the date of vesting shallbe deemed to be sell led by the State Government with suchintermediary, [lessee, tenant, grantee or grove-holder] as thecase may be, who shall, subject to the provisions of this Act.be entitled to take or retain possession as a bhumidharthereof.”

35. As seen above, proviso below sub-section (3) of Section2, of Govt. Grants (UP Amendment) Act makes applicableCeiling Act to the land held by a grantee under the Govt.Grant. It has already been noted that a ‘Govt. Grantee’ or a‘’lessee’ is covered within the definition of ‘tenure holder’given in under clause (17) read with clause (9) of Ceiling Actand the definition of ‘person’ in Section 4 (33) of the UPGeneral Clauses Act. Thus conjointly reading the provisionsof the Ceiling Act and the Land Reforms Act, the grantee ofland from the government is a holder of land in the status ofa Bhumidhar and the land can be subjected to ceiling limit.To the lands held by the company, which is grantee of theGovt., the provisions of Ceiling Act would be attracted. Suchgrantee being a lessee from Government has no right totransfer the land without permission of the Government. Itcan grant leases or sub-leases under the UP Tenancy Act butthe lessees/sub-lessees can claim no rights contrary to theterms of the grant. All the transfers made by the Company orFarm by sale or lease contrary to the terms of the Govt. Grantcreate no independent rights in favour of the said transfereesor lessees. The claims of transferees and lessees based on the AB

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Aprovisions of UP Tenancy Act were, therefore, rightly negativedby the ceiling authority and the High Court.30. We may also reproduce the observations made in paragraph32 of the Escorts Farms Ltd. (Supra) :- “32. No action of the revenue authorities can, therefore, estop theBceiling authorities from ignoring the claims of tenancy rights onthe land set up by the lessees/sub-lessees. The rights betweenthe government and the grantee are strictly to be regulated by theterms of the grant and in accordance with the Govt. Grants (UPAmendment) Act, 1960. The entries in revenue records andCrecognition of any tenancy rights of the lessee and/or sub-lesseeas hereditary tenant, Sirdars or Bhumidhars under the UP TenancyAct can have no adverse legal effect on the Govt. Grant whichhas an overriding effect under the Govt. Grants Act. No estoppelcan operate against the overriding statute so as to bind the ceilingauthorities to accept the tenancy rights of the lessees/sub-lesseesDas indefeasible in application of Ceiling Act to the lands in question.”

31. From the aforesaid discussions, it is clear that the provisionsof Ceiling Act would be applicable in case of grantee of Governmentunder a lease agreement. The grantee being a lessee from theGovernment has no right to transfer the land without fulfilling theEconditions stipulated in Clause 9 of lease deed. The terms of the leasedeed though provide for sub-lease for agricultural purposes but sub-lessees can claim no independent rights as a tenure holder.

32. Thus, the appellant being a sub-lessee continues to be anostensible holder of land and the government grantee, the RespondentFNo. 2, to be the real holder and the ceiling authorities as well as the HighCourt have rightly dismissed the claim of the appellant.

33. In the result appeals fail and are dismissed. However, in thefacts and circumstances, we do not make any order as to costs.

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Devika Gujral

Appeal dismissed.

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