# i.ramchamlra Sht"oy v. Hil'a Brite

- **Citation:** [1964] 2 S.C.R. 737
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Bench:** P. Sinha C. J, J. C. Shah, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i-ramchamlra-sht-oy-v-hil-a-brite-2956
- **Pages:** 16

## Headnote

Land Revenue, Exemption, Abolition of-Validity of
<nactment-Grant-Terms and conditions of grant-If amount
to lease or farm-"Estate and Estate-lwlder", Meaning ofExemption of Estate-holder-Sa.lsette Estates (Land Revenue
Exemption Abolition) Act, XLVII of 1951, .<s. 2 (b), 2 (d), 3,
4, 5.
The Legislature of the Bombay State enacted the Salsette
Estat<B
(Land
Revenue
Exemption
Abolition)
Act,
XL VII of I 95 l which was brought into force on March l,
1952. The object of the Act was to abolish the rights of
intermediaries in lands and to abolish exemption from land
revenue en joyed by holders of certain estates in the island
ofSalsette in the Bombay Suburban and Thana District in the
State of Bombay. The "Estate" as defined under the Act
me,.ns a village or a part thereof specified in the Schedule
a\(ached to the Act. The .even villages namely (l) Mogra
(2)
Wasivr.co, (3)
Bandivli,
(4)
Majas (5)
Part Pahad;,
(6) Goregaon and (7)
Poisar are included in the schedule
of the Act. The East India Company transferred its 'farm
rights' in these seven villages to one Banajee by a 'cowl' dated
October 2, 1830.
Ultimately by a document dated September
22, 1847, the East India Company granted these seven villages
to Banajee free from liability to pay land revenue and assessment in the nature of larid revenue in future and on certain
terms and restrictions set out therein. The freedom from
JiabiHty to pay land r~vcnue was subject to these restrictions
1963
i.ramchamlra Sht"oy
v.
Hil'a Brite
Ayyangar J.
1963
A/,,il 3
1963
Byramjtt Jeejubhoy
(P) ltd,
v.
State of Maliara.shl10
-
...... ~+ -
....
738
SUPREME COURT REPORtS [1964] VOt.
namely ( 1) to preserve the rights of occupants of land (2) to
pay annual rent of Re. 1/- if demanded, (3) to maintain
rights of dewa•thans, dharmadawas and customary allowance.
to •J'al"'
(4)
to the right of levy of customs and excise
duties and also duties in
respect of manufacture and sale of
spirituous I iquors and poisonous or injurious drugs by the
Government. The appellant is
the succcssor-in-interc.t of
Banajce. The appellant filed the suit in which he challenged
the application of provisions of the Act to the lands of the
appellant. The suit was dismisstd by the Trial Court and
tbe appellate Court.
Held (I)
that the grant dated September 22, 1847,
was not a lease within the meaning of s. 2 (d) of the Act as it
transferred the right of ownership in the lands and not merely
the right to enjoy them.
(2)
that the grant was not in the nature 9f a "farm"
because the grantee was not liable to pay any revenue as a
farmer.
(3)
that the villages were at the date of the Act held
under an agreement from the State of Bombay and bvth the
conditions prescribed under the definition, namely specification
in the schedule and holding under a cowl were fulfilled.
(4)
that cl. 3 of s. 3 saves the right of a person other
than an estate holder, who holds the land in an estate exempt
from payment of land revenue, if such exemption is under a
special contract or grant
m~,de or recognised under the terms
of the cowl, or under a law for the time being in force.
CIVIL APPELLATE jumsDICTJOS : Civil Appeal
No. 560 of 1962.
Appeal from the judgment and decree dated
February 23, I 961, of the Bombay High Court in
Appeal i\'o. 50 of 1959.
S. T. Desai, V. J. illercliant and R.A. Gagrat,
for the appellant.
C. ](, Daphi,ary, Attorney-General for India,
S. G. Patimrdhan and R. JI. Dliebar, for the respondent.
2 S.d.R.
SUPREME COURT REPORTS
739
1963.
April 3. · The Judgment of the Court
was delivered by
SHAH J.-By an agreement called 'Cowl' dated
October 2, 1830 the Principal Collector of Konk<:n
conferred on behalf of the East India Company
"farm
rights" upon
one Cursetjee
Cowasjee
Banajee-hereinafter called "Banajee"-in seven
villages (1)
Mo~ra; (2) Wasivre, (3)
Bandivli
(4)
Majas (o)
Part Pahadi, (6) Goregaon and
(.7)
Poisar on terms and conditions set out therein.
By two letters dated October 17, 1835 and July 17,
1841 the original cowl .was

## Text

•
t i
2 S.C.R .
SUPREME COURT REPORTS
737
The result is that the appeal fails and is
dismissed with costs.
Appeal disrnissed.
BYRAMJEE JEEJEEBHOY (P) LTD.
v.
STATE OF MAHARASHTRA
(B. , P. SINHA C. J., J. C. SHAH and
N. RAJAGOPALA AYYANGAR JJ.)
Land Revenue, Exemption, Abolition of-Validity of
<nactment-Grant-Terms and conditions of grant-If amount
to lease or farm-"Estate and Estate-lwlder", Meaning ofExemption of Estate-holder-Sa.lsette Estates (Land Revenue
Exemption Abolition) Act, XLVII of 1951, .<s. 2 (b), 2 (d), 3,
4, 5.
The Legislature of the Bombay State enacted the Salsette
Estat<B
(Land
Revenue
Exemption
Abolition)
Act,
XL VII of I 95 l which was brought into force on March l,
1952. The object of the Act was to abolish the rights of
intermediaries in lands and to abolish exemption from land
revenue en joyed by holders of certain estates in the island
ofSalsette in the Bombay Suburban and Thana District in the
State of Bombay. The "Estate" as defined under the Act
me,.ns a village or a part thereof specified in the Schedule
a\(ached to the Act. The .even villages namely (l) Mogra
(2)
Wasivr.co, (3)
Bandivli,
(4)
Majas (5)
Part Pahad;,
(6) Goregaon and (7)
Poisar are included in the schedule
of the Act. The East India Company transferred its 'farm
rights' in these seven villages to one Banajee by a 'cowl' dated
October 2, 1830.
Ultimately by a document dated September
22, 1847, the East India Company granted these seven villages
to Banajee free from liability to pay land revenue and assessment in the nature of larid revenue in future and on certain
terms and restrictions set out therein. The freedom from
JiabiHty to pay land r~vcnue was subject to these restrictions
1963
i.ramchamlra Sht"oy
v.
Hil'a Brite
Ayyangar J.
1963
A/,,il 3
1963
Byramjtt Jeejubhoy
(P) ltd,
v.
State of Maliara.shl10
-
...... ~+ -
....
738
SUPREME COURT REPORtS [1964] VOt.
namely ( 1) to preserve the rights of occupants of land (2) to
pay annual rent of Re. 1/- if demanded, (3) to maintain
rights of dewa•thans, dharmadawas and customary allowance.
to •J'al"'
(4)
to the right of levy of customs and excise
duties and also duties in
respect of manufacture and sale of
spirituous I iquors and poisonous or injurious drugs by the
Government. The appellant is
the succcssor-in-interc.t of
Banajce. The appellant filed the suit in which he challenged
the application of provisions of the Act to the lands of the
appellant. The suit was dismisstd by the Trial Court and
tbe appellate Court.
Held (I)
that the grant dated September 22, 1847,
was not a lease within the meaning of s. 2 (d) of the Act as it
transferred the right of ownership in the lands and not merely
the right to enjoy them.
(2)
that the grant was not in the nature 9f a "farm"
because the grantee was not liable to pay any revenue as a
farmer.
(3)
that the villages were at the date of the Act held
under an agreement from the State of Bombay and bvth the
conditions prescribed under the definition, namely specification
in the schedule and holding under a cowl were fulfilled.
(4)
that cl. 3 of s. 3 saves the right of a person other
than an estate holder, who holds the land in an estate exempt
from payment of land revenue, if such exemption is under a
special contract or grant
m~,de or recognised under the terms
of the cowl, or under a law for the time being in force.
CIVIL APPELLATE jumsDICTJOS : Civil Appeal
No. 560 of 1962.
Appeal from the judgment and decree dated
February 23, I 961, of the Bombay High Court in
Appeal i\'o. 50 of 1959.
S. T. Desai, V. J. illercliant and R.A. Gagrat,
for the appellant.
C. ](, Daphi,ary, Attorney-General for India,
S. G. Patimrdhan and R. JI. Dliebar, for the respondent.
2 S.d.R.
SUPREME COURT REPORTS
739
1963.
April 3. · The Judgment of the Court
was delivered by
SHAH J.-By an agreement called 'Cowl' dated
October 2, 1830 the Principal Collector of Konk<:n
conferred on behalf of the East India Company
"farm
rights" upon
one Cursetjee
Cowasjee
Banajee-hereinafter called "Banajee"-in seven
villages (1)
Mo~ra; (2) Wasivre, (3)
Bandivli
(4)
Majas (o)
Part Pahadi, (6) Goregaon and
(.7)
Poisar on terms and conditions set out therein.
By two letters dated October 17, 1835 and July 17,
1841 the original cowl .was modified and Banajee
was required to pay an amount to the East India,
Company of Rs. 2, 708/7 /- per annum in consideration of the benefits conferred upon him by the said
c;;wl.
Banajee constructed extensive salt works in ·
the villages and expended Rs. 2/- lakhs in improving
and developing the villages. On September 22,
184 7 the East India 'Company granted to Banajee
the seven villages on certain terms, freed from the
covenants of the cowl,
and also
from liability to
pay assessment on land revenue in consideration of
the amount spent by him for improving the villages,
and an amount of Rs. 30,000/-
paid by him to the
East India Company. The villages were held and
enjoyed by the successors of Banajee under the terms
of the grant without payment of land revenue till
the year 1952. The Legislature of the Bombay
State enacted the Salsette Estates (Land Revenue
Exemption Abolition) Act, XL VII of 1951 (hereinafter called the Act) which received the assent of the
President on January 4, 1952 and was brought into
· force on March 1, 1952. The Act was enacted as
a measure of agrarian reform and formed part of a
pattern of legislation undertaken by the State of
Bombay to abolish the rights of intermediaries
between the State and the cultivator of the soil.
The Act provided for abolition of exemptions from
payment of land revenue enjoyed by estate-holders,
•
. 1963
Byramj1e Jeejeebhoy
(P) Ltd .
••
State of Mafraraslztra
Shah J.
'
•
1963
Byramje1 J1tj11blroy
(PJ Ud.
v.
Sta11 ef Ma/laroshtra
SMli J.
a • - -:... -
S.
~ -
740
SUPREME COURT REPORTS [1964] vot.
in certain specified villages in the Island of Salsette,
and for the vesting of waste lands in the village;;.
.
The .Collector of Bombay Suburban District by
his letter dated February 28, 1952 informed the appellant-who is
the successor-in-interest of Banajee
under the grant that with effect from March l,
1952 as provided by s. 4 of the Act all waste
lands which were not the property of the e.;cate·
holder under the cowl and all waste lands which
had been demised in the cowl as the property of the
estate-holder bu't which had not been appropriated
before August 14, 1951 and all other kinds of property referred to in s. :n of the Land Revenue Code
and which were not the property of any individual
or an aggregate of persons legally capable of holding
the same shall vest in the Government. He also
invited attention to the provisions of ss. 3 and 5 of
the Act and informed
the appellant' that the
Bombay Land Revenue Code will apply to all lands
of the appellant's villages with effect from March l,
1952 and directed the appellant from that date not
. "to collect land revenue or rent as the case may be
in respect of the lands to which the provisions of
the Act" applied.
By letter dated March 5, 1952
the appellant submitted that the seven villages were
held as absolute owner under and by virtue of the
indenture of conveyance dated September 22, 184 7
between the East India Company and Banajee and
that under the terms of the grant all the lands in
the villages were absolutely and for ever freed and
discharged from the obligations of the Cowl of 1830
and also freed and discharged from all liability to
pay land revenue, under Regulation XVII of 1827
and from all liability for esscssment in nature of land
revenue, and that the Act did not and could not
apply to the lands of the appellant in the above.
mentioned villages-the appellant being the absolute
owner of the land in the villages.
By letter dated
June 25, 1052 the Collector informed the appellant -
•
2S.C.R.
SUPRE:ME COURT REPORTS
741
that the provisions of the Act were applicable to the
seven villages and the requisition to treat the villages_
otherwise could not be granted.
On November 28, 1952 the appellant com·
menced an action against the State ?f Bombay
(which was numbered Suit No. 52 of 1953) in the
High Court of Judicature at Bombay on its original
·side for a decree declaring that the provisions of the
Act did not apply to the seven villages of the appellant and for an
injunction restraining the
State
from enforcing the provisions of the said Act against
the appellant iti respect of the said seven villages.
The State of Bombay b'y its written statement contended that the appellant was not the absolute
owner of the said seven villages·, that the Act applied
to those villages and a decree for declaration and
injunction as claimed could not on that account be
granted. K. K. Desai, J., who heard the suit held
that the indenture dated September· 22, 184 7 was
not a lease, but it could be regarded as a grant of a
farm of the right to recover revenue as an agent to
whom the prerogative of the State was delegated as
provided in the grant, and that in any event the
mdenture was in the nature of an agreement under
which the estate was held from the Government and
therefore the seven villages were an "estate" in the
hands of the appellant within the meaning of s. 2(b)
of the Act. The estate was also not exempted from
the operation of sub-s. (1) of s. (3) of the Act.
In appeal a Division Bench of the High Court
held that the indenture dated September 22, 184 7
created a right not of the nature of a 'lease' or
'farm' but the villages were held unqer an 'agreement'
from the State Government within the meaning of
s. 2 (d) of the Act and therefore under a 'cowl' and
the villages were an 'estate' within the meaning of
s. 2 (b) and ~xemption from payment of land revenue
conferred by the ipdent11re was statutorily abolishe\!,
1969
Byramj11 Jeejeehhoy
(Pl Ltd.
V;
State of Maharashtra
Shah J.
1941
Hyr-.ni;tt Jt,ittbha_J
(Pi lra.
••
: lot1 of Mahara.s~t1a
.. ...
~ ...
. -·
742
SUPREME COURT REPORTS [1964] VOL.
The Court also held that the rights of the.appellant
in the villages as grantee of the exemption were not
saved by cl. (3) of s. 3, and confirmed the decree
passed by the Trial Court.
With certificate granted
by the High Court this appeal is preferred by the
appellant ..
The appellant had initially challenged the
validity of the Act as infringing the fundamental
rights under Arts. 19 ( l) (f) and 31 of the Constitution but this plea was abandoned after the enactment of the Constitution Fourth Amendment Act,
I !l55.
Two questions survive in this appeal :
(I) Whether the villages held by the appellant
constitute an estate within the meaning
of s. 2 (b) of the Bombay Act 47 of 1!151;
and
·
(:!) If the ~illages constitute an estate, whether
the exemption
from
payment of land
revenue granted under the indentu're
is
saved by sub-s. (3) of s. 3.
The 'Act was enacted with the object, as the preamble
recites, to abolish exemption from
land
revenue
enjoyed by the holders of certain estates in the Island
of Salsette in the Bombay Suburban and Thana District in the state of Bombay. By sub-s. (2) of s. I the
Act extends to the villages specified in the Schedule
to the Act and the seven villages granted to Bana jee
are included in the Schedule.
Section 2 defines by
cl. (Ii) an 'estate' as meaning a vilhige or a part thereof specified in the Schedule, and held under a cowl.
Clause (d) of s. 2 defines 'cou:l' as meaning a lease,
a farm or an agreement under which an estate is
held from the State Government. The material
provisions of ss. 3 (I) (a) and (3) are as follows :-
"( J)
Notwithstanding anything contained in
the co1d, a decree or order of a · court or any
2 S.C.R.
SUPREME COURT REPORTS
743
other instrument or any law
in force, but subject to
sub-section (3).
for the time being
the provisions of
(a) all lands in any, estate are and shall be
liable to the payment of land revenue to
the State Government in accordance with
the provisions of the Code and the rules
made thereunder;"
"(3)
Nothing in sub-section
( 1) shall
be.
deemed to affect the right of any person to hold
any land in an estate wholly or partially
exempt from the payment of land revenue
under a special contract, or grant made or
recognized by the terms of the cowl in respect
of the estate or under a law for the tiine being
in force in favour of any person other than
the estate-holder."
By sub-s. (1) of s. 3 all lands in an estate subject to
the exception contained in sub-s. (3) are made liable
to pay land revenue to the state : this is so notwith-
~tanding anything contained in the cowl, a decree
or order of a court or any other instrument or any
law for the time being in force.
Sub-section ( 1) is,
however, subject to the provisions of sub-s. (3) to
which we will separately
refer. Lands rendered
liable .for payment of land revenue by sub-s. (1)
of s. 3 are lands in an estate which means a village
or part of a village specified in the schedule to the
Act and held under a 'cowl.
Every village in dispute
held by the appellant is included in the schedule, but
unless the village is held under a lease, a farm or an
agreement from the State Government it will not be
an estate for the purpose of the Act.
The grant is an elaborately drawn up document.
It consists of the preamble, premises, reservations,
babendtJm, covenants of the transferor and the
1969
Byramjee Je1jeebhoy
(PJ Ltd.
••
State of Maharashtra
Sh•h J.
1963
f1y;omj11 )tt}tebhoy
(/') ltd.
v.
St•l1 ef ·WaMr•1hlro.
Sltah J.
744
SUPREME COURT REPORTS [1964] VOL.
transferee and unconditional covenant of title. In
the preamble of the wwl granted in 1830 by the
Ea~t India Company of seven villages and the terms
thereof and
the expenditure incurred by Banajee
upon the said villages amounting to Rs. 2 lakhs on
the construction of extensive salt works, arc recited.
Then there is a reference to a request by Ban a jee
to the East India Company for grant to him in
consideration of the sums expended by him ,and to
an offer to pay Rs. 30,000/- to
the
East India
Company of the said villages freed and absolutely
discharged from the cowl and the rents or annual
sums payable thereunder and from the terms and
stipulations thereof. It then refers to the payment
of Rs. 30,000/-
by Banajee in pursuance of the
agreement so entered into. The grant then proceeds
to set out the premises, viz. : "they the said East
India Company x x x by these presents do grani alien
and release to the said Cursetjee Cowasjee Banajee his
executor.s, administrators and· assigm all those seven
villages" together with all rights in and appertaining to the villages, x
x
x "except, and reserving to the said Company x
x
x and all other
persons, all rights of navigation and fishing as at
present
exercised and the reversion and reversions
remainder and remainders yearly and other rents
issues and profits of all and singular the villages land
hereditaments and premises
hereinbeforc granted,
aliened and released or expressed and intended so to
be together with the fees to arise upon the grant of
licences by the Collector of Thana or other revenue
authority of the district x
x x . And all the
estate, right,
title, interest, inheritance, use, trust
possession, property, possibility, claim and demand
whatsoever both at law and in equity of the said
East India Company of into from and out of the
same premises and every part and parcel thereof.''
Then follows the habendum "To have and to hold
all and singular the villages lands hereditaments and
premises hereinbefore granted aliened and released
2 S.C.R.
SUPREME COURT REPORTS
745
or mentioned and expressed so to be unto and to the
use of the said Cursetjee Cowasjee Banajee his heirs
and assigns
absolutely forever freed and absolutely
discharged from the said cowl and the several
provisions thereof and the rents and annual sums
payable thereunder to the said Company x x x
and freed and discharged from all liability to contribute to the land revenue under Regulation XVll
of 1827 and from all liability to assessment in the
nature of land· revenue but subject nevertheless to
all laws and regulations which now are or from time
to time may be in force in the Island of Salsette touching the sale and manufacture of spirituous liquors or
poisonous or injurious drugs or substances and subject
to all duties of customs and excise not being in the
nature of land revenue or in substitution thereof or
of any part thereof and subject also to the payment
of an annual rent of sum of Rupee one to be paid on
the first day of January in each year forever to the
said East India Company their successors and assigns
if demanded and subject also to such estates rights
and interests as any villages tenants and occupiers
had in any lands in their respective occupation on
the second day of October one thousand eight
hundred and thirty." The indenture then proceeds to
recite that Banajee had covenanted with the East
India Company that he, his heirs, successors, execu·
tors, administrators and assigns shall continue to pay
the said rent reserved on the terms mentioned if
demanded, continue devasthans, dharamada'was and
allowance to Pals and shall not make any innovations
and shall conform to the rules, ordinances and regulat.
ions as existing and applicable to farmers.
Finally,
the indenture grants an unconditional covenant of
title and quiet enjoyment to the village lands and
authorises Banajee to take rents and profits thereof
without let or hinderance from the grantor.
The scheme of the document as disclosed by
the terms is to relieve the grantee Banajee from the
. 1968
11,Jr.mjte Jeeje1bh1:,
(P) ltd .
••
State of Maharasht1t
Shah /,
19~3
Byr.,,,j11 J11jttbhoy
(P) Ltd .
••
State of A.fahar•rhtra
.lhah J.
... .... .
., .....
746 SUPREME COURT REPORTS [1964] VOL,
Cowl of the year 1830 and the covenants and obligations thereunder and to grant to him in ownership in
consideration of the amounts spent by him and
·the amount of Rs. 30,000/- paid by him to the grantor the seven villages together with all rights therein
except those which were expressly reserved.
The
rights reserved were the rights of navigation and
·fishing, reversion and reversions remainder and remainders, rents, issues and profits and fees to arise
upon the grant of licences by the Collector of Thana
for the sale of poisonous drugs. The grantee is by
the terms of the grant exempt from liability to pay
land re\·cnuc under Regulation XVII of 1827 and
assessment in the nature of land revenue in future,
but the exemption is subject (a) to all laws and
Regulations relating to the sale and manufacture of
spirituous liquors or poisonous or injurious drugs or
substances, (b) to payment of duties of customs and
excise not being in the nature of land revenue, ( e)
also to the payment of an annual rent of Re. l/· if
demanded, and (d) to such estates rights ahd interests
of the tenants and occupiers of the lands in the
villages. The indenture then imposes upon the gran·
tee an obligation to maintain all dewasthans, dharmadawa.s and allowances to Pals, and to receive only
the prevailing rates of assessment and not to make
any innovations in that behalf and to conform to all
laws applicable to farmers and the relation subsisting
between him and the tenants, and to be liable for all
acts of his servants and agents for injury caused to
any person.
The grant of the villages free from
liability to pay land revenue, was therefore subject to
a triple rsetriction :
(I) Restriction in the interest of the tenants
or occupants holding lands in the estate
and also of the rights of deu:asthan.q,
dharmadawas
and customary allowances
to Pals:
2 S.C.R.
SUPREME COURT REPORTS
747
(2) The sovereign right to levy customs and
excise duties and also duties in respect of
manufacture and sale of spirituous liquors
and poisonous or injurious drugs ; and
J96J
ByrQmj11 J1ejubhoy
(P) Ltd.
••
Sratt of Maharashtra
(3)
Subjec
1t to a liability to pay an annual
Shah J.
rent of Re. 1/-, if demanded.
Such a grant cannot be regarded as a lease, for
a lease contemplate; a demise or a transfer of a right
to enjoy land for a term or in perpetuity in consideration of a price paid or promised or services or other
things of value to be rendered periodically or on
specified occasions to the transferor. The grant does
not purport to demise merely a right of enjoyment of
land : it confers rights of ownership in land. There
is again. no . contractual right reserved either expressly or by implication, to determine the grant. The
reservation of the reversion and reversions remainder
and remainders yearly, and rents issues and profits
of all the lands hereditaments and profits in the
premises clause, is of the nature of a restriction
upon the estate transferred and does not restrict
the quality of the estate.
The rent to be demanded
was again not stipulated as consideration for the
grant of the right to enjoy land, but expressly in
consideration of granting freedom from liability to
pay assessment.
The conclusion of the trial Court
and the High Court that the villages were not held
under a lease within the meaning of s.2 (d) of Act 47
of 1951 must be accepted.
Nor is the indenture of the nature of, a 'farm'
within the meaning of that clause.
The Island of
Salsette in which the seven villages are situate was
taken over in 1774 by the East India Company
from the Peshvas who had only . about 40 years
earlier wrested it from the Portuguese. The Portuguese administrators were originally accustomed to
farm out ;).II revepues of the villages to the highest
1953
B_yfamji. J11jt(bhny
(P) lid. •
v.
Stott of AfahauBhtra
Shah J.
' ..
748 SUPREME COURT REPORTS [1964] VOL.
bidders.
ft appears that the Peshva rulers did not
alter the system
of farming out the revenues.
After assumption of authority, the East India Company modified the system of land tenures and revenue
administration.
In the first instance the Company
gave certain hereditary rights to the old occupants
of the land which were to ensure so long as they
paid a fixed assessment measured in most cases in
kind.
Farming of revenue was also modified.
The
farmers were given grants of villages either for a
limited term or in perpetuity under which, in consideration of paying a fixed lump sum to the East
India Compay the grantee enjoyed all the rights of
revenue, agricultural as well as non-agricultural,
except the rights e ~pressly excluded from the grant.
It appears that the original cowl in favour of Banajee
was a farm of this nature.
By the indenture of 1847
he was discharged from all liability under the farm
or the co1rl of 1830 and all the obligations thereof
ceased, and the villages ·subject to the reservations
already mentioned were granted absolutely without
reserving any power to cancel the grant or to resume
the lands. The grantee was not accountable for
collection of the revenue and he was not required to
make any payment either fixed or proportionate to
the revenues collected by him to the East India
Company, annually as a farmer.
It is true that in
relation to the occupants of holders of the land before the date of the grant, the grantee was consituted
a superior holder and had merely the right to collect
land revenue payable by the holders. But under the
terms of the indenture Banajee was a grantee of the
sovereign right to recover land revenue: he was in
consideration of the money expended and paid by
him entitled
to
appropriate all the collections.
Banajee was not an age'lt of the East India Company
for recovering the revenue, nor was he a transferee of
a right to recover revenue of land belonging to the
East India Company in consideration of payment
either a fixed sum; or a share in the revenue
~ s.a.:R.
SUPREME COURT REPORTS
749
collected.
He was made a grantee both of the lands
and of the right to recover land revenue from the
occupants. Such a grant cannot be regarded as in
the nature of a farm.
But we agree with the Trial Court and the
High Court that the villages were held by Banajee
under an agreement with the East India Company.
By the indenture the villages were granted to
Banajee, and he was freed from liability to pay
assessment.
The freedom from liability to pay land
revenue was subject to certain covenants-covenants
to respect the rights of occupants of the land and
not to introduce innovations in the rates of assessment
in respect of all lands in the possession of tenants, to
continue Dewasthans, Dharmadawas and allowances
and to pay 'annual rent' of Re. 1/- if demanded.
The right to hold the villages free from liability to
pay land r-evenue
was therefore conferred by
the indenture subject to the restrictions imposed by
agreement between the East India Company and
the grantee.
Counsel for the appellant urged that the
agreement contemplated bys. 2 (d) of the Act is a
personal agreement and not one relating to the estate
granted, and submitted that the covenants in the
indenture being not of that nature the appellant
does not hold the villages under an agreement. We
are unable to accept this contention. It is true
that where property is transferred. absolutely by one
person to another, it cannot be said that the property
transferred is held under an agreement with the
transferor merely because of the covenant of title.
But when the State transfers property to a citizen,
it does not thereby, in the absence of an express
provision, grant exemption from liability to pay
! evenue.
The right to recover revenue is not an
incident of ownership: it is a prerogative of the
sovereign, or a liberty or franchise of some authority
1963
Byramjee Jeejeebhoy
(PJ Ltd.
v.
State of MaharashtrtJ
Shalt!.
1'61
8)ron~jt1 lttjtthhll)•
l~) L1J
v.
Stall oj .lfolUJrOJhlro
.
·~·-·
.. ,
750
StJPREMt coukt REPORTS [1964) VOL
claiming derivatively from the sovereign.
Mere
grant of land by the State docs not absolve the
grantee from liability to pay revenue.· Under the
indenture dated September ~2, 184 i, the grantee
was given a right to hold the villages free from
liability to pay revenue on certain terms, one of
which was to pay rent of Re. If- per annum when
demanded: The villages were granted subject to
the restrictions, in absolute right and freedom from
liability to pay revenue in respect of the villages was
given subject to certain conditions.
Imposition of
these condit,ions subject to which exemption from
liability to pay land
revenue was
granted, and
acceptance thereof constituted an agreement within
the meaning of s. 2 (d).
The villages though held
in absolute right are still in the matter of liability
to pay land revenue held under an agreement from
the State Government. In the grant in question there
is in the first instance an obligation to pay 'annual
rent', if demanded.
There is also an obligation
to respect the rights of the holders of the lands and
of Dewasthans, Dhammdau:us and to make allowance
to pals. There. is then an obligation not to alter
the rights of the holders of land to their prejudice,
and the grant of the right to exemption from payment
of revenue is made subject to all laws and regulations
which are from time to time in force in the Island of
Salsette touching the sale and
manufacture of
spirituous liquors or poisonous or injurious drugs
or substances.
These are all covenants which raise
contractual obligations on the exemption from land
revenue, absolute grant of the land notwithstanding.
Both the conditions prescribed under the definition,
namely, specification in the Schedule and holding
under a cowl as defined under the Act were therefore
fulfilled, and the villages were at the date of the Act
held under an agreement from the State of Bombay.
The next
question is whether the grant is
exempt from the operation of sub-s. ( 1) of s. 3, under
t ..
. ~-
.
..
2 S.C.R..
SUPREME couR.t REPORTS
751
which all lands in an estate 'are and shall be liable
to the payment of land revenue
to the State
Government'. This liability is imposed notwithstanding anything contained in the cowl, or decree
or order of a court or any other instrument or any
law for the time being in force. Prima facie, the
covenants contained in the cowl whereby the grantee
was· disch·arged and absolved from liability to pay
land revenue must be regarded as superseded by the
statutory imposition of liability to pay land revenue.
But the operation of sub-s. (1) of s. 3 is subject to
the provisions of sub-s. (3). That sub-section states
that nothing in sub-section ( l) shall be deemed to
affect the right of any person to hold land in an
estate wholly or partially exempt from the payment
of land revenue under a special contract, or grant
made or recognized by the terms of the cowl in respect
of the estate or under a law for the time being in
force in favour of any person other than the estateholder. This clause only protects the rights of a
person to hold . land in an estate exempt from
payment of land revenue, if such exemption is
under a special contract or grant made or recognised
by the terms of the cowl in respect of the estate or
under a law for the time being in force, and a person
whose rights are not so affected must be a person
other than the estate·holder.
By sub-s. (1) therefore
exemption granted from payment of land revenue
to the grantee of the cowl is extinguished: sub-section
(3) however saves the rights of persons· other than
the estate-holder, who hold land in the estate.
By
express provision the estate-holder is excluded from
the benefit of sub-s. (3 ).
The intention of the
Legislature is clear: it is to withdraw the exemption
in favour of the estate-holder from payment of land
revenue if such right was granted under a cowl.
That withdraw! is not to affect the rights of persons
holding land in an estate under a special contract, or
grant which was made or recognized by the terms of
the cowl even if the right was to hold the land exempt
1963
Byramje1 Jeejeeblioy
tP) Ltt.
v.
State ef Maharashtra
Shah J.
1963
}j_lramju
lvjerb-~1!'1
(Pl l t,/.
v.
Stelt of Jo./ali11rtJJhtra
Shoh J.
J9G3
Ap<il I
752 SUPREME COURT REPORTS [1964) VOL.
from the payment of land revenue. The futility
of the argument that the expression "person" when
it first occurs in sub·s. (3) includes the estate-holder,
becomes obvious if the clause is read after substituting
the expression "est~te-holder" for "person".
In that view of the case, this appeal fails and
is dismissed with costs.
Appeal dismissed.
RAJ A RAM J AISW AL
V.
STATE OF BIHAR
(K. Si;nsA RAO, RAGHUBAR DAYAL and
J. R. MUDIIOLKAR JJ.)
Exciu O.fficu-Confession made to a7' Excise /n.•f"clor
in the cour.oe of i1westigalion-lf a wnfession made to a police
ufficer-"l'olicc O.Oie€r" 1 jJeaniny of--Excisr. Inspector, if a
polict officer-Cod• of Criminal Procetkm 1898 (Act V of l.90~)
ss.
1.;1;, 162-lnaian Evidenr,e Act, 1872 (Act I of 11!72)
s. 25-Bihur nnrl Ori'8a Exc;.e Act, 191.5 (Act 2 of 1915),
ss. 2 (S), 7, 47 (a), 68, G9, 70, 71, 72, 73, 71, 78,
SO,
82, 95, 96 . .
The appellant alongwith five other people, one of whom
was driving the car, were
travelling in a car belonging to
the appellant's brother. The car was stopped by the Excise
Inspector who conducted a search of the car and recovered
five bundles of Ganja, four from the luggage boot and one
from the leg space in front of the seat of the car. The boot
could be opened with the keys in the possession of the appellant
as \\'ell as one of the keys in the posses5ion of the driver. 'l'hc
appellant made a confession to the Excise Inspector admitting
his guilt. At the trial of the apprllant alongwith the other
persons he pleaded an alibi and
pleaded innocence. The
•