# KANNAN DEVAN HILLS PRODUCE COMPANY LTD v. THE STATE OF KERALA AND ANOTHER

- **Citation:** [1973] 1 S.C.R. 356
- **Court:** Supreme Court of India
- **Decided:** 1972-04-27
- **Case number:** Writ Petition No. 44 of 1971
- **Bench:** S. M. SrKRr, J. M. Shelat, A. N. Ray, I. D. Dua, H. R. Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kannan-devan-hills-produce-company-ltd-v-the-state-of-kerala-and-another-5792
- **Pages:** 27

## Headnote

B
Kannan Devan Hills (Resumption of Lands) Act, 1971 (Kera/a Act
5 of 1971)-Comvetency of State legislature to enact-Sections 4 & 5 of
Act do not fa// under entry 52 List I but under entries 18 of List II and
.i2 of List III In Seventh Schedule of Constitution-Act whether has protection of Act 31A of Constitution-Land in question whether °'estate',
The petitioner was in possession of an area of approximately 1,27,904
acres, commonly known as the 'Concession Area' lying contiguously
in the Kannan Devan Hills village. The concession was firs.t given to the
predecessor-in-interest of the appellant company in 1877 by the poonjar
Chief for a consideration of Rs. 5,0001-. After some years a yearly sum
of Rs. 3,000 was to be paid to the rent collector of the Chief. In 1878
the Maharaja of Travancoro ratified the Concession on c~rtain conditions.
In 1886 the agreement called the Second P.ooniat Ccincession was entered
into modifying. the previous deed of ratification.
A Royal Proclamation
was made on September 24, 1899 whereby the Poonjar Chief surrendered
the propriety rights which he had exercised over the tract known as
Anjanad and Kannan Devan Hills.
According to the petitioner it had
all times been holding, cultivating, enjoying and dealing with the Concasion land as the absolute owner thereof. The petitioner further alleged that
it had established 23 tea estates, with factories in each estate for the
manufacture of tea, hospitals,. quarters, township and shopping centres.
The Kannan Devan Hills (Resumption cJf Lands) Act 1971 (Kerala Act 5
of 1971) the lands agricultural & n&n-agricultural situated in the Kannan
Devan Hills Vilj.<lge vested in the Government Qf Kerala. The petitioner
company filed a :ovrit petition under Art. 32 of the Constitution challenging
certain provisions of die Act.
The questions that fell for consideration
were : (i) whether the impugned Act was within the legislative competence of the State of Kerala; (ii) whether the impugned Act was protected from challenge under Art 3 lA of the Constitution.
HELD : (i) The State has legislative competence to legislate on entry
18 List II and entry 42 List III.
This power cannot be denied on the
ground that it has some effect on an industry controlled under entry 52
List T.
Effect is not tho same thing as subjectl-matter. If a State Act,
otherwise valid, has effect on a matter in List I it does not cease to be
legislation with respect to an entry in List II or List Ill. The object of
ss. 4 and 5 seems to be enable the State to acquire all the lands whic'.1 do
not fall within the categories (a), (b) and (c) of s. 4(i). These provisions are really incidental to the exercise of the power of acquisition. The
State cannot be denied a power to ascertain what land should be acquired
by it in the public interest. [369 C-Dl
The fact that the plantation was run as an integrated unit cannot
impinge upon and :take away the legislative power of the State in respect
of List II entry 18" 370 [F-G]
Ch. Tika Ramji v. State of Uttar Pradesh, [1956] S.C.R.
393, 420
and Canadian Pacific Railway Company v. Attnrney General, [1950) A.C.
122, 123, 140, applied.
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KANNAN DEVAN HILLS CO. V. KERALA (Sikri, C.J.)
357
Baiinath Kedai v. State of Blhar, [1970] 2 S.C.R. 100, Harakchand
Ratanchand Banthia v. Union of India, [1970] 1 S.C.R. 712 and State
of Maharashtra v. Madhavrao Damodar Patilrhdnd, [19681 3 S.C.R. 712,
referred to.
There was no r~pugnance between the provisi'?ns of the i'!'p~gned Act
and the Tea Act. It was said that there is conthct ~use 1t 1s the T-:a
Board and not the Land Board, which should determme what land is
necessary for the efficient working of the plantation; but Parliament has
not chosen even if it could., to say so. [373G-Hl
Paresh Chandra Chatterjee v. The State of Assam and Another, [1961]
3 S.C.R. 88, applied.
(ii) On the material placed before the C',0urt it was difficult to resist
the conclusion that the lands in dispute fell within the

## Text

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356
KANNAN DEVAN HILLS PRODUCE COMPANY LTD.
A
v.
THE STATE OF KERALA AND ANOTHER
April 27, 1972
[S. M. SrKRr, C.J., J. M. SHELAT, A. N. RAY, I. D. DUA AND
H. R. KHANNA, JJ.]
B
Kannan Devan Hills (Resumption of Lands) Act, 1971 (Kera/a Act
5 of 1971)-Comvetency of State legislature to enact-Sections 4 & 5 of
Act do not fa// under entry 52 List I but under entries 18 of List II and
.i2 of List III In Seventh Schedule of Constitution-Act whether has protection of Act 31A of Constitution-Land in question whether °'estate',
The petitioner was in possession of an area of approximately 1,27,904
acres, commonly known as the 'Concession Area' lying contiguously
in the Kannan Devan Hills village. The concession was firs.t given to the
predecessor-in-interest of the appellant company in 1877 by the poonjar
Chief for a consideration of Rs. 5,0001-. After some years a yearly sum
of Rs. 3,000 was to be paid to the rent collector of the Chief. In 1878
the Maharaja of Travancoro ratified the Concession on c~rtain conditions.
In 1886 the agreement called the Second P.ooniat Ccincession was entered
into modifying. the previous deed of ratification.
A Royal Proclamation
was made on September 24, 1899 whereby the Poonjar Chief surrendered
the propriety rights which he had exercised over the tract known as
Anjanad and Kannan Devan Hills.
According to the petitioner it had
all times been holding, cultivating, enjoying and dealing with the Concasion land as the absolute owner thereof. The petitioner further alleged that
it had established 23 tea estates, with factories in each estate for the
manufacture of tea, hospitals,. quarters, township and shopping centres.
The Kannan Devan Hills (Resumption cJf Lands) Act 1971 (Kerala Act 5
of 1971) the lands agricultural & n&n-agricultural situated in the Kannan
Devan Hills Vilj.<lge vested in the Government Qf Kerala. The petitioner
company filed a :ovrit petition under Art. 32 of the Constitution challenging
certain provisions of die Act.
The questions that fell for consideration
were : (i) whether the impugned Act was within the legislative competence of the State of Kerala; (ii) whether the impugned Act was protected from challenge under Art 3 lA of the Constitution.
HELD : (i) The State has legislative competence to legislate on entry
18 List II and entry 42 List III.
This power cannot be denied on the
ground that it has some effect on an industry controlled under entry 52
List T.
Effect is not tho same thing as subjectl-matter. If a State Act,
otherwise valid, has effect on a matter in List I it does not cease to be
legislation with respect to an entry in List II or List Ill. The object of
ss. 4 and 5 seems to be enable the State to acquire all the lands whic'.1 do
not fall within the categories (a), (b) and (c) of s. 4(i). These provisions are really incidental to the exercise of the power of acquisition. The
State cannot be denied a power to ascertain what land should be acquired
by it in the public interest. [369 C-Dl
The fact that the plantation was run as an integrated unit cannot
impinge upon and :take away the legislative power of the State in respect
of List II entry 18" 370 [F-G]
Ch. Tika Ramji v. State of Uttar Pradesh, [1956] S.C.R.
393, 420
and Canadian Pacific Railway Company v. Attnrney General, [1950) A.C.
122, 123, 140, applied.
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KANNAN DEVAN HILLS CO. V. KERALA (Sikri, C.J.)
357
Baiinath Kedai v. State of Blhar, [1970] 2 S.C.R. 100, Harakchand
Ratanchand Banthia v. Union of India, [1970] 1 S.C.R. 712 and State
of Maharashtra v. Madhavrao Damodar Patilrhdnd, [19681 3 S.C.R. 712,
referred to.
There was no r~pugnance between the provisi'?ns of the i'!'p~gned Act
and the Tea Act. It was said that there is conthct ~use 1t 1s the T-:a
Board and not the Land Board, which should determme what land is
necessary for the efficient working of the plantation; but Parliament has
not chosen even if it could., to say so. [373G-Hl
Paresh Chandra Chatterjee v. The State of Assam and Another, [1961]
3 S.C.R. 88, applied.
(ii) On the material placed before the C',0urt it was difficult to resist
the conclusion that the lands in dispute fell within the expression 'J anmam
right'.
It is stated in Travancore Land Revenue Manual Volume IV
there are no lands that do not belong to a Janmam and the Sircar becomes
a Janmi by escheat, confiscation or otherwise.
The effect of the Royal
Proclamation of 1899 must be that the Sircar became the Janmi. '[376F]
Kava/appara Kottarathil Kocltuni v. State of Madras, [1960] 3 S.C.R.
887 and Sukanuram Sabbayo!!am v. State of Kara/a, A. I. R. 1963 Kerala
I 01. referred to.
(iii) From the Travancore Land Rev1mue Manual it would appear
that the State grants like Kanan Devan Hills Concession and Trn square
Miles Concession and Munro Lands,
wer~ treated under tho heading
'Pandaravaka Lands', i.e., land belonging to the Si'rcar. It was held by
this Court in Pushothaman Nambudri's case that Pandaravaka Verum·
pattam lands could be regarded as local equivalent of an estate under
cl. (2) of Art. 31A. If it is held that the land in question does not fall
within the expression 'janmam right' it may possibly be covered by the
decision of this C<>urt in Purus/1ottam Namboodri's case but as no arguments were addressed on this point it was not necessary for the Court to
express its final opinion. [379C-Dl
Purushothaman Nambudri v. Sdre of Kera/a, [1962] Supp. l S.C.R.
753. referred to.
(iii) The. three purposes mentioned in s. 9 namely (1) reservation of
land for promotion of agriculture; (2) rese:rvation of land for the welfare
of agricultural population and ( 3) assignment of remaining lanJs to agri·
c.ulturists and agricultural labourers, were covered. by the exp'fession
"agrarian reform" and the legislation was protected from challenge under
Art. 31·A. [382~
Deputy Commissioner and Collector, Kamrup v. Durga Nath Sarina,
[1968] 1 S.L.R. 561, P. Vajmvaiu /lfodaliar v. Special Deputy Collector,
Madras, f19651 1 S.C.R. 614 and Ranjit Singh v. State of Puniab,
fl965J 1 S.C.,R. 82.
The wide wording of the first two purposes did not carry them beyond
the. concept of _'agrarian reform'.
The definition of 'common purpose'
which was s11stamed by this Court in Ranfit Singh's case shows that the
purposes susf'ained thereby would come under either the express "promotion of agriculture" or ''welfare of agricultural population" in s. 9,
Indeed some would fall under both.
F<Yr instance, reservation df lands
for manure pits, water-works or wells, viHage water courses or water
358
SUPREME COURT REPORTS
. [1973] 1 S.C.R.
channels and grazing grounds would promote agriculture; schools and
playgrounds, dispensaries, public latrines etc. would be for the welfare of
the agriculturists, [381CJ
If the State were to use lands for purposes which have no direct connection with the promotion of agriculture or welfare of agricultural population the State could be restrained from using the lands for these purposes. Any fanciful connectioff with these purposes would not be enough.
[38JD]
If the two purposes were understood to mean that these include only
"common purposes', whicl\. were sustained by this Court and purposes
similar thereto it would be difficult to say that they are not for agrarian
reform. In a sense agrarian reform is wider than land reform. lt includes
besides land reform something more and something more is illustrated by
the dtfinition of "common purpose" which was sustainea by this ·court
in Ranjit Slngh's case. [381E-FJ
The third object-settlement of agriculturists and agricultural labouris cleady covered by the expression "agrarian reform".
The main object
Qf agrarian reforms has been to acquire excess land and settle landless
la_llQurers and agriculturists. [382B-CJ
Ranjit Singh v. Slate of Punjab, [1965.] 1 S.C.R. 82 and Staie of Uttar
Pradesh v. Raia Anand, f'l967] I S.C.R. 362, applied.
Deputy Comn1ission·-r and Collector, Kan1rup v. Durga Nath Sarina
fl9681 I S.0.R, 561 and P. Vajravalu Mudaliar v. Special Deputy Col·
lector, Madr~s, f1965] I S.C.R. 82, referred to.
ORIGINAL JURISDICTION : Writ Petition No. 44 of 1971.
Under Article 32 of the Consiitution of India for enforcement
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of the FundamentarRights.
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•}.:~>c. Chagla, A. J, Rana, Joy Joseph, B. Datta, J. JJ. Dadach'anjl, 0, C. Mathur and Ravinder Narain, for the petitioner.
M. M. Abdul Khader, Advocate-General for the State of Kerala,
V. A. Seyid Muhammad, Verghese Kaliath and K. M. K. Nair, for
the respondent.
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J. B. Dadachanji, for the interveners.
The ,Judgment of the Court was delivered by
Sikri, C.J. Two main points .arise in this petition under
art. 32 of the Constitution, brought by the Kannan Devan Hills
Produce Company Ltd., hereinafter referred to as the petitioners
( 1) Whether the Kannan Devan Hills
(Resumption of Lands)
Act, 1971 (Kerala Act 5 of 1971 )-hereinafter referred to as the
impugned Act-is within the legislative competence of the State
. ·of Kerala· and (2) whether the impugned Act is protected from
challenge 'under art. 31A of the Constitution, and if so, to what
extent.
·
The petitioner is in possession of an area of approximately
1 27 904 acres commonly known as the 'Concession Area' lying
c~ntlguously n{ the Kannan Devan Hills village.
The petitioner
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!(ANNAN DEVAN HILLS CO. v. KERALA (Sikri, C.J.)
359
grows arul manufactures tea in the plantation set up and developed
by it.
Tlie petitioner's predecessor-in-title was one Mr. John
Danial Munro, who obtained, what is called, the first Pooniat
Concession from Punhatil Kayikal Kela Vanna Valuja Raja, on
July 11, 1877 (Mithunam 20, 1052). This Concession recited
that an application was made for the grant of the above property
to the Raja for coffee cultivation.
The Concession conveyed the
properties in consideration of Rs. 5,000/-. It was further stipu'
lated in the Concession that "you shall! clear and remove the
jungles, and reclaim the waste lands within the said boundaries,
and cultivate them with coffee up to the year 1058 and from the
.year 1059, pay our rent collector a yearly rent at the rate of 3,000
British Rupees."
Various other conditions were mentiqned but
it is not ilece.Ssary to refer to them because this Concession was
superseded by another agreement called the Second Pooniat Consession.
Before we refer to the terms of the Second Poo11iat Conces·
sion, we may mention that H.H. the Maharaja executed a deed of
ratification, dated November 28, 1878, by which the Government
ratified the First Pooniat Concession dated July 11, 1877. This
deed .of ratification laid down the terms and conditions in regard
to Government assessment and other matters. under which the
Government permitted the grantee to hold the land.
These terms
and conditions were declared in the Deed to be independent of
any rents or payments due to the Poonjar Chief under the.
Grantee's Agreement with him.
Clause 5 of the Deed of Ratificati<>n, is important.
It provides, infer alia, that "the grantee can appropriate to his own use
within the limits of the grant all timber except the following and
such as may hereafter be reserved l)amely, Teak, Cole Teak,
Blackwood, Bhony, Karoonthaly, Sandalwood; should he carry
any timber without the limits of the grant it will b.~ subject to the
payment of Kooteekanom, ·or Customs Duty ........ "
The eleventh clause reads :
"The land granted shall be hel.d in ,perpetuity as
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.. heritable or transferable property, but every case· of
transfer of the. grant by the grante1: shall be irn,mediately
made known to the Sircar, who shall have the right of
apportioning the tax, if a portion of the holding is
transferred."
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The fwelfth clause stipulates :
"The discovery of usefu~ mines: and treasures within
the limits of the grant shall be communicated to the
Sircar, and the grantee shall in respect to such mines and
treasures, abide by the decision of the Sircar."
360
SUPREME COURT REPORTS
[1973] l S.C.R.
The sixteenth clause provides :
"The grantee shall be bound to pres~rve the forest
trees growing on the banks of the principal streams running through the tract to the extent of fifty yards in
breadth on each side of the stream, the underwood only
being permitted to be cleared and coffee planted instead.
Similarly he shall also be bound to preserve the trees
about the crest of the hill to the extent of a quarter of a
mile on each side."
On August 2, 1886. the agreement called the Second Pooniat
Concession was entered .into modifying the previous deed of ratification. It appears that by this time a company called the North
Travancore Land Planting and Agricultural Society, Ltd.
had
acquired the rights in the said land from John Danial Munro. The
Land Revenue Manual (Vol. 3, Part I Revised Edition 1936, p
7) summarises the main provisions.
For our purposes we may only mention the following provisions of the deed :
( 1) Assesment of one-half of a British Rupee per
annum on every acre of land, other than grass
land, which is opened up for the purpose of cultivation or otherwise.
( 2) Assessment of two annas and eight pies per
annum on every acre of grass land brought
under cultivation or taken \IP for homesteads and
farmsteads, or reserved as shooting reserves or
for the grazing of cattle or for any other purposes.
( 6) The Society may use and appropriate to its own
use within the limits of the Concession all timber
except
teak,
cole-teak,
blackwood,
•.~bony
(Karunthaly) and sandalwood, but should not
fell any timber beyond what is necessary for
clearing the ground for cul.tivation or for building, furniture and machinery, within the limits
of the grant.
No unvalued timber or articles
manufactured therefrom should be carried outside the'!imits of the grant except in conformity
with the rules of the Forest and Customs Departments for the time being in force.
(l 0) The land is to be held in perpetuity as heritable
or transferable property but every case of transfer of the grant by the Society should be immediately made known by the Society to the Government.
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KANNAN DEVAN HILLS CO. v. 'l<ERALA (Sikri, C.J.)
361
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( 11) On the discovery by the Society of any useful or
valuable mines, minerals or treasures within the
limits of the grant, the same should at once be
communicated to the Government and the Society
should, in respect to such mines, minerals and
treasures, abide by the dc:cision of the GovernB
ment.
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A Royal Proclamation was made on September 24,
1899
(Kanni 9, 1075). It recite~ :
"Whereas wci deem it expedient to clearly di:clare the
position of this State in respect of the tract known as
Anjanad and Kannan Devan Hills, we are pleased . to
declare as follows :
(1) The tract known as Anjanad and Kannan Devan
Hiils is an integral portion of our territory and
all rights over it belong to and vest in us.
(2) The inhabitants of the said tract and all others
whom it may concern ar1~ hereby informed and
warned that they are not to pay any taxes, rents
or dues, or make any other payment to the Poonjar Chief or his representatives or to any person
other than an officer of our GoYernment authorised in this behalf, in respect of anything in,
upon or connected with the said tract, with the
exception, however, of a payment of rupee three
thousand per annum from the succeessors in
interests of the late Mr. J. D. Munro of London
and Peermade now being paid to the said Chief
in virtue of a Lease deed executed by the said
Chief in favour of the said late Mr. J. D. Munro
on the 11th July, 1877, and which we are pleased
to permit the said Chief to continue to receive.
(3) The lands within the said tract will be dealt with
by our Government in the: same manner as lands
in other parts of our territory with such modifications as the circumstances and conditidns of the
said tr~ct may require and all taxes, tents and
?ues hitherto paid, and that may hereafter be
imposed by our Government shall, with the
exception of the sum of rupees three thousand
aforesaid, be paid by the occupants of lands
within the said tract whose occupation has been
or may be recognized or confirmed by our Government, and of such portions of the said tract
as may from time to time hereafter, with the per-
362
SUPR.EME COURT REPORTS
[1973] l S.C.lt
mission of our Government, be occupied, to the
Officers of our Government who may be authorised in this behalf."
According to the Land Revenue Manual (Vol. III Pt. I page
9) "this Proclamation was the outcome of an arrangement made
by the Government, with the Poonjar Chief for the surrender of
certain proprietary rights which he had been exercising over the
tract known as Anjanad and Kannan Devan Hills."
We have set out these facts in detail because it will be necessary to appreciate the significance of the documents in order to
decide the question whether these lands fall within expression
'Janmam right' in art. 3 lA .of the Consrttution.
According to the petitioner it has at all times been holding,
cultivating, enjoying and dealing with the Concession Land as the
absolute owner thereof. The petitioner further alleges th.at it has
established 23 tea estates, with factories on each estate for the
manufacture of tea, hospitals, quarters· and township, and shopping centres and is employing approximately 18,500 persons for
the running of the said estates. The breakup of the area of
1,27, 904 acres was given as follows :
Tea Estate~
1. Tea Planted area
23,570,95 acres
2. Fuel area
17,851 ·55
3. Building sites, roads, Worl<ers gardens,
Manner Township .
2,605 ·35
4. Grazing land
1,453 ·75
5. Swamps and Streams
2,407 ·36
6. Uncultivable lands, rocks, slips, barren
lands, ridges etc.
6,789 ·51
31,107 ·52 31,107 ·52 acres
7. Lands interspersed within the boundaries
of the tea plantation cOnsidered necessary
for the protection and efficient management
of the tea plantation
23,'!04 ·00 acres
Totul:
78,082 •47
8. Forest Area
22,311 -00
9. Set apart for Wild Life Preservation
21,353 ·60
10. Other grass lands
6,157 ·49
1,27,904 ·56
We may now notice !he provisions of the impugned Act. The
preamble reads as follows :
"Whereas the lands comprising the entire revenue
village of Kannan Devan Hills in the Devicolam taluk. of
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KANNAN DEVAN lilLLS co. V. KERALA (Sikri, C.J.)
363
the Kottayaaa district had been given on lease by the
then Poonjar Chief to late Mr . .T-Olm Da.nid ~unro of
London and Peermade on the 11th day of July, 1877,
for coffee cultivation;
And Whereas the right, title and interest of the lessor
had been assumed by the former Government of Travancore;
And Whereas by such asswnption the lands have
become the property of the former Government of Travancore;
And Whereas the Goverrun1~nt of Kerala have bee
come the successor to the former Government of TravanD
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core;
And Whereas large extent of agricultural lands in
that village has not been converted into plantations or
utilised for purposes of plantatio1l and such lands are not
required for the purposes of the 1:xisting plantation:
And Whereas the Government consider that such
agricultural lands should be resumed for the distn'bution
thereof for cultivation and purposes ancillary thereto."
It would be noticed that in the preamble the State claims that
the right, title and interest of the Poonjar Chief-had been assumed
by the former Government of Travancore and the lands had become the property of the former Government of Travancore and
now . the Government of Kerala.
It will also be noticed that the
object is to resume agricultural lands for their distributicin for
cultivation and purposes ancillary thereto.
"Plantation" is defined in s. 2 ( f) o.f the inlpugned Act ;
" "Plantation" means any land used by a person
principally for the cultivation of tea, coffee, cocoa, rubber, cardamom. or cinnamon (hereinafter relerred to as
"Plantation crops" ".
Section 3 may be set out in full
"3. Vesting of Possession of certain/ands: (1) Notwithstanding anythin~ contained in any other law for
the time being in force, or in any contract or other document, but subject to the provisions of sub-sections (2)
and ( 3), with effect on and from the appointed day, the
possession of all lands situate in th.e Kannan Devan Hills
village in the Devicolam taluk of the Kottayam district
shall stand transferred to and vest in the Government
free from all encumbrances, and the right, title and
6-Ll286 Sup CI/73
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StJPRl!M!! COVRT REi>ORfS
[1973] l S.C.R.
l~tere'St pf the lessees and all other persons including
ngnts of mort~gees and holtlers of encumbri!nt:es, in
respect <1f such lands, shall stand eit.tinguished.
( 2) Nothing contained in sub-section
( l) shall
app1y in respect ot-
( a) plantations, other than plantations belonging to
trespassers;
(b) bU!ldings, bther than buildings belongini; to trespassers, and lands appurtenant to, and necessary
for the convenient enjoyment or use of, such
buildings;
( c) play-grounds and burial and burning
ground~;
and
(a) lands irl the possession of th, Central Government or . any State Ooverntnent or the Kcrala
State Elcctticity Board.
( 3) Nothing contained ln sub-section
( 1)
shall
apply in respect of so much extent of land held by a
lessee under his personal cultivation as is within the ceiling limit applicable to hlm under any Jaw for the time
being in force or any building or structure standing thereon or appurtenant thereto."
It will be noticed that what the section vest~ in the Government is not only agricultural lands but all lands situated in the
Kannan Devan Hills village in the Devicolam taluk of the Kottayam
district.
It extinguishes the rights of the lessees and other persons
and vests the lands in the State subject to some exceptions which
are cointained in sub-ss. (2) and (3) of s.
3.
Sub-section (2)
exempts plantations.
Sub-section ( 3) dues not have any bearing
on the problem before us.
Se1:tion 4 is a peculiar provision which has led the counsel for
the petitioner to argue vehemently about the legislative compete.nee of the State.
It reads thus :
"4. Restoration of possession of lands
in artain
cases.-( 1) Where the person in possession of a plantation considers that any lands, the possession of which has
vested in the Government under sub-section
(1)
of
section 3,-
(~) is ·necessary for any purpose ancillary to the cultivation of plantation crops in sucli, plantation or
for the preparation of the same for the market;
or
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365
( b) being agricultural land interspersed within the
boundaries of the area 1;ultivated with plantation
crops, is necessary for the protection and efficient management of such cuTtivafion; or
(.c) is necessary for the preservation of an eXi.sting
plantation, he may, within sixty days from the
date of publication of this Act in the Gazette,
apply to the Land Board for the restoration of
posSeSsion of such !anti.
~ 2 y An .application under sub-section ( 1) shall be
in such fonn as may be prescribtd·.
(3) On .rcce.ipt of an application under sub~section
( 1 ) , the Land Board shall, after giving the applicant an
opportunity of being heard and after such inquiry as it
deems necessary by order dete1'1iline tile extent of land
necessary for the purpose or purposes specified in the
application, and such order shall be final.
( 4) As soon as m:.y be after detennining the extent
of land necessary for the pilrpdse or purposes specified in
the application under sub-secticn ( 1), the Land Board
shall cause such land to be demarcated and put the
applicant in possession of such land'.
( 5) Any person put in possession 0f any land under
sub-section ( 4) shall be entitled to possess that land on
the same terms and subject to the same conditions on or
subject to which he was holding such land immediately
before the appointed day."
It will be seen thats. 4 proceeds on the basis that certain lands,
which have vested in the State under s. 3, may be necessary for
the efficient carrying on of the plantation.
A procedure is laid
down by which the Land Board shall detennine the extent of land
necessary for purposes mentioned ins. 4(a), (b) and (c) to be
speeified in the application of the landholder, and direct restoration of possession.
Section 5 alleviates the rigour of s. 4 by giving the Collector
power to remove the hardship, if any, on the management of the
plantation on the vesting of any land under sub-s. (1) of s.
3.
Section 8 provides that no compensation shall be payable for the
extinguishment under sub-s. ( 1) of 1. 3 of the right, title and
interest of the lessees or other persons or of the rights of mortga-
. gees or holders of encumbrances.
Section 9 may be set out in 'full It reads thus
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[1973] 1 S:C.>..
"9. Assignment of /ands.-(1) The Government,
s~all, after.reserving such extent of the land, the possess10n of which has vested in the Government under subsecti~ ( 1) of section 3 (other than lands, the possession
of which has been restored under section ( 4), as may be
necessary for purposes directed towards the promotion
of agriculture or the welfare of the agricultural population to be settled on such lands, assign ·on registry the
remaining lands to agriculturists and agricultural labourers in such manner, on such terms and subject to such
conditions and restrictions, as may be prescribed.
(2) The Government may, by notification in the
Gazette, delegate their power of assignment under subsection ( 1 ) to the Collector, subject to such restrictions
and control as may be specified in the notification."
The position taken by the State in its reply is as follows : The
petitioner is not an absolute owner, but only a lessee under the
Government, especially since the Proclamation issued by H.H. the
Maha.raja.
The lands to which the provisions of the Act apply,
fall within the definition of 'estate' under art. 31A(2) of the Constitution. If the petitioner is the absolute owner of the lands subject to levy of basic tax, as contehded, the lands held by the petitioner are 'estate' because they are held in Janmam rights or at any
rate as the local equivalent of 'estate' in its basic concept as understood in the decisions of this Court falling under art. 31A(2)(a)-
(i) of the Constitution. In the alternative it is alleged that treating the lands as a lease-hold under the State, these are undoubedly
lands held or let for the purposes of agriculture or purposes ancillary thereto coming wit!:lin the inclusive definition of 'estate' under
art. 31A(2) (a) (iii) of the Constitution. It is denied that. the
lands were held primarily for development of the petitioner's tea
industry. It is alleged that the petitioner had used large tracts of
land for diverse agricultural purposes as was clear from the averments in the petition.
It is further asserted that the impugned
legislation is a law relation to the agrarian reform.
Duruig the course of the hearing, the petitioner's counsel said
that he was willing to argue on the basis. that the petitioner was a
lessee and not a full proprietor.
After we had heard the arguments for some time and it became necessary to adjourn the case,
the State obtained permission to amend its reply and raised the
point that the lands of the petitioner were '.estate' within the purview of art. 31A(2) (a)(i) being janmam right.
We may reproduce the relevant paras.
"The Raja of Poonjar was admittedly
the Janmi of the said lands at the time of letting as per Annexures
B & C to the Writ Petition.
By. the Royal Proclamation of 1899
(Annexure R-1) the Janmam right of the lessor, the Poonjar Chief,
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367
got vested in the Government of Travancore.'" [Para 4 ( 1) ].
"After the said vesting the writ petitioner is a lessee under a
Jaruni-the Sircar, the State."
[Para 4(2)]. Para 4(4) refers
to ·pages 314 and 315 of Travancore State Manual-Vol. III-
. where 'it is recorded that the lands of Poonjar Chief are Janmam
lands.
Further reference is made to Travancore Land Revenue
Manual, Vol. IV, which we will discuss a little later.
· In the sur-rejoinder affidavit the petitioner denies that Poonjar
Chief or Raja was the J anmi of the land covered by the impugned
legislation.
It is further alleged that "even asuming without
admitting that the Poonjar Chief was a Janmi, the Janmam rights
of the Chief became vested in the Sircar by the Royal Proclamation of 18 99 ( Annexure R-1 ) , the lands became part of and merged with the Sircar land.
The Sircar as the overlord and the Ruler
of the State became the sole owner of the land and the petitioner
became a permanent and perpetual lessee of Sircar with heritable
and alienable rights.
The impugned legislation in no way deals
with the Janmam rights, if any, vested in the Sircar." It is further stated that "in any event, without prejudice to the other contentions, it is rnbmitted 'that Article 31A(2) (a) (i) speaks only of
"Janmam right" and not "Janmam" land as such'."
We may first deal with the quesltion of legislative compet,ence.
We have set out the relevant provisions of the impugned legislation.
It seems to us clear that in pith and substance it is a law dealing
with entry 18 of List II and entry 42 of List Ill. Entry 18
reads :
F
"Land, that is to say, rights in ·or over land, land
tenures including the relation of landlord and tenant, and
the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans;
colonization.''
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Entry 42 List III reads :
"Acquisition and requisitioning of propetty."
This Court has upheld the legislative competence of States to
deal with land reforms under entry 18 of List II and entry 42 of
List III in various cases.
The learned counsel for the petitioner, however, contends that
ss. 4 and 5 of the impugned Act are a' law with respect to entry 52
List I.
These provisions, according to him, regulate the carrying
on of tea industry, within the competence of Parliament, by controlling the land available for tea plantation. · He says that it is
impossible to run an efficient plantatiion except by having sufficient
land (I) for purposes ancillary to cultivation and plantation of the
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[1973] l S.C.R.
crop and ( 2) for the preparation of the same for the market.
He
says that it is also necessary to have land interspersed within the
boundaries of the area cultivated with plantation for the preservation of the existing plantation.
He urges that if the effect of the
legislation is to control the working of the tea plantation the le~is
Iation must be regarded a~ legislation with respect to entry 52 List
I.
The learned counsel has drawn our attention to various reports
to show that the plantation is a self-contained unit of organisation.
In para 1.11 of the Report of the Study Group for Plantation (Tea)
it is stated :
"1.11. The cultivation and manufacture of tea do
not exhaust the activities associated with tea plantations.
A typical plantation covers a wide area, having a large
resident population in a number of settlements. Management of plantations involves construction and maintenance of roads and buildings, running of hospitals,
schools, creches, and canteens, etc. and in a miniature
form, transport and public health activities. In short, a
plantation is a self-contained unit of organisation."
In the report of P. C. Borooah Committee on Tea Industry
following measures were recommended :
"1. 18. Taking into condderation the difficulties
faced by the industry because of, Government' enactments and in view of our recommendation in regard to
the necessity for undertaking extensions of plantings to
achieve the plan targets laid down by Government and
the need for replacement to increase foreign exchange
earnings of the country, the Committee recommends that
th.e following measures should be taken by Government:-
(i) The Central Government should take steps to
convene a conference of all representatives· of tea producing State .Governments to frame a well-considered
policy in regard to land required for expanding tea production. · Where land is proposed to he resumed by the
State Uovernments concerned, the Tea Board should
be taken into consultation.
(ii) The principles underlying all resumptfon ofland'
should be such as to ensure that tea estates would have
enoug/1 land available for extensions and for other ancilh1ry purpose for their viability and protection.
Land
within an estate should in no case be taken oY~r as the·
integfity of estates must at all costs be maintained."
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369
In the Second Fi'.'.e Year Plan, whil.e considering; the question
of exemption from ceilings one of the factors t~en into a".Count
was the "integrated nature of operations, especially whe:e mdustrial and agricultural work are undertaken as a composite enterprise." It was recommended that "if these consi~erations a:e kept
in view there would appear to be an advantage m exemptmg the
following categories of farms from the operations of ceilings which
may be proposed :
( 1) tea, coffee and rubber plantation
......
It seems to us clear that the State has .legislative competence
to legislate on entry 18 List II and ~ntry 42 List III.
This power
cannot be denied on the ground that it has some effect on an industry controlled under entry 52 List I. Effect is not the same thing
as subject-matter. If a State Act, otherwise valid, has effect on a
matter in List I it does not cease to be a legislation with respect
to an entry in List lI or List III. Tlle objec:t of ss. 4 and S seems
to be to enable the State to acquire all the lands which do not fall
within the ca~egories (a), (b) and (c) of s. 4(1). These provisions are really incidental to the exercise of the power of acquisi·
tion.
The State cannot be denied a power to ascertain what land
should be acquired by it in the pubJi,c interest.
The case of Baijnath Kedai v. State of Bihar(I) relied on has
no relevance. It was held in that case that entry 23 List II was
subject to entry 54 of the Union List and once a declaration was
made .and the extent laid down, the subject of legislation to the
extent laid became an exclusive subject for legislation by Parliament.
The scope of entry 52 of the Union List is slightly di«e-,
rent.
Once it is declared by Parliament by law to be expedient in
the public interest to control the industry, Parliament can legislate
on that particular industry aud the States would loae their power
to legislate on that indusry.
But thi!1 would not prevent the States
from legislating on &objects .other than that particular industry.
In Ch. Tika Ramji v. State of Uttar flradesh( 2 ) Bhagwat,i, J.,
observed:
"Industry in the wide sense of the .term would be
capable of comprising three different aspects : ( 1) raw
materials which are an integral part of the industrial
procelili, (2) the process of IlllllJUfacture or production,
anci ( 3 ) the distribution of the ;products of the industry.
The raw materials would be goods which would be comprised in Entry 27 of List II. The process of manufac-
(I) [1970] 2 S.C.R. JOO.
(2) f/956] S.C.R. 393, 420.
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[1973] l S.C.11..
ture or production would be comprised in Entry 24 of
List II except where the industry was a controlled industry when it would fall within Entry 52 of List I and the
products of the industry would also be comprised in
Entry 27 of List II except where they were the products
of the controlled industries when they would fall within
entry 33 of List III.
This being the position, it cannot
be said that the legislation which was enacted by the
Centre in regard to sugar and sugarcane could fall within
Entry 52 of List I. Before sugar industry became a
controlled industry, both sugar and sugarcane fell within
Entry 27 of List II but, after a declaration was made by
Parliament in 1951 by Act LXV of 1951, sugar industry
became a controlled industry and the product of that
industry viz., sugar was comprised in Entry 33 of List
III taking it out of Entry 27 of List II."
In Harakchand RatOJ1chand Ban:thia v. Union of Jndia( 1),
Tikka Ram's case (supra) was referred to but the Court held
that it was not necessary for the purposes of that case to attempt
to define the expression "industry" precisely or to s1tate exhaus·
tively all its different aspects. The Court observed :
"But we are satisfied in the present case that the
manufacture of gold ornaments by g0ldsmiths in India is
a "process of systematic production" for trade or manufacture and so falls within the connotation of the word
"industry" in the appropriate legislative entries."
In State of Maharashtra v. Madhavrao Damodar Patilchand(1)
the point was left open whether the State legislature had or had not
the authority to legislate adversely 011 matters falling within entry
52 List I.
None of these cases assist the petitioners.
The fact that the plantation is run as an integrated unit was
strongly relied on but this cannot impinge upon and take away
the legislative power of the State in respect of List II entry 18.
The Privy Council in Canadian Pacific Railway Company v.
Y. Attorney Ge11eral(') dealing with a similar matter observed:
"But their Lordships can find neither principle nor
authority to support the competence of the Parliament of
canada to legislate on a matter which clearly falls within
the enumerated heads in s. 92 and cannot be brought
(1) [1970] I S.C.R. 419.
(2) [1968] 3 S.C.R. 712.
(3) [1950] A.C. 122, 123, 140.
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KANNAN DEVAN !IlLLS CO. V. KERALA (Sikri, C.J.)
371
within any of the enumerated heads in s. 91 merely because the activities of one of the parties concerned in the
matter have created a unified system which is
widespread and important in the Dominion."
The facts in that case are set out briefly in the headnote as
follows:
"The appellant, the Canadia.n Pacific
~y., . Co.,
which owned and managed the Empress Hotel in Victoria, British Columbia, while not denying that the regula-
{ion of hours of work was ordinarily a matter of "property and civil rights in the province" under head 13 of
s. 92 of the British North America Act, 1867, and
accordingly within the legislative competence of the provincial legislature, contended, inter-alia, that the company's activities had become such an extensive and important element in the national economy of Canada that the
Dominion Parliament was entitled under the general
powers conferred by the first part of s.