# Motipur z.,.mindari Co. Ltd v. The State of Biht1r and A not her. Da11J

- **Citation:** [1953] 1 S.C.R. 720
- **Court:** Supreme Court of India
- **Decided:** 1950-09-11
- **Case number:** Civil Appeals Nos. 6'2 and 63 of 1953
- **Bench:** Patanjali Sastri C. J, MuKHERJEA, S. R. DAs. GHULAM HASAN, Bhagwati
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/motipur-z-mindari-co-ltd-v-the-state-of-biht1r-and-a-not-her-da11j-191
- **Pages:** 10

## Headnote

Bihcir Laud Reforms Act, 1950, ss. 2 (o) aiid (r), 3-Applicabil·
ity of Act to cmnpanies-'iPerson'', "proprietor'', ''tenure-holder",
meaniuys of . .
The. word" person" in the definitions of
1
' proprietor" and
"tenure-holder" contained in s. 2 (o) and s. 2 (r) respectively of
the Bihar Land Reforms Act, 1950, includes companies incorporated under the Indian Companies Act, 1913. There is nothing
repugnant in the subject or context of the Act to prevent the
inclusion of a company within the terms " proprietor"
and
•
0 tenure-holder".
On the contrary such inclusion is necessary in
order to give full effect to the object of the Act.
Pharmaceutical Society v. The London and Provincial Suppl11
Association, Limited (1880) 5 App. Oas. 857 distinguished.

## Text

195.1
720
SUPREME cotrR~
1 REPOR'l'S
[19531
JIIO'I'fPUR ZAMINDARI CO. LTD.
v.
THE STATE OF BIHAR AND ANO'I'HER.
RAJA JA:N"JUNATH ROY AND NARENDRA
NATH ROY AND CO. TJTD.
v.
'I'HE STA'I'E OF BIHAR AND ANOTHER.
[PATANJALI SASTRI C. J., MuKHERJEA, S. R. DAs.
GHULAM HASAN and BHAGWATI JJ.]
Bihcir Laud Reforms Act, 1950, ss. 2 (o) aiid (r), 3-Applicabil·
ity of Act to cmnpanies-'iPerson'', "proprietor'', ''tenure-holder",
meaniuys of . .
The. word" person" in the definitions of
1
' proprietor" and
"tenure-holder" contained in s. 2 (o) and s. 2 (r) respectively of
the Bihar Land Reforms Act, 1950, includes companies incorporated under the Indian Companies Act, 1913. There is nothing
repugnant in the subject or context of the Act to prevent the
inclusion of a company within the terms " proprietor"
and
•
0 tenure-holder".
On the contrary such inclusion is necessary in
order to give full effect to the object of the Act.
Pharmaceutical Society v. The London and Provincial Suppl11
Association, Limited (1880) 5 App. Oas. 857 distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 6'2 and 63 of 1953. Appeals under Article 13'2
(1) of the Constitution of India from the Judgment
aud Order dated '22nd December, 195'2, of the High
Court of Judicature at Patna (Ramaswami and Sarjoo
Prosad JJ.) in Miscellaneous Judicial Cases Nos. '238
and '24'2 of 1952.
P. R. Das (J. C. Sinha and L. K. Chaudhry, with
him) for the appellant in both the appeals.
M. 0. Setalvad, Attorney-General for India (L. N.
Sinha and Bajrang Sahai, with him) for the respondents in both the appeals.
1953. April 17. The Judgment of the Court was
delivered by S. R. DAS J.
..
l
8.0.R.
SUPREME COURT REPORTS
721
' DAS J.-Tbis judgment disposes of Civil Appeals
No. 62 of 1953 and No. 63 of 1953 which have been
heard together.
The Motipur Zamindari Company Ltd., the appellant in Civil Appeal No. 62 of 1953, was incorporated
in 1932 under the Indiau Companies Act and has its
registered office in Bengal. It supplies sugar-cane to
a sister concern named Motipur Sugar Factory Ltd.
Raja J ankinath Roy and N arendra Nath Roy and
Co., Ltd., the appellant in C. A. No. 63 of 1953, was
· incorpor:i.ted in 1933 under the Indian Companies
Act and also has its registered office in Bengal. This
company owns Zamindari properties in Purnea in the
State of Bihar as well as in Maida in the State of
West Bengal. It carries on business, amongst others,
as banker and financier.
On the ·30th December, 1949, a bill entitled the
Bihar Land Reforms Bill was passed by the Bihar
r~egislature and having been reserved for the consideration of the President received bis assent on the 11th
September, 1950.
'l'be Act so passed and assented to
was published in the Bibar Gazette on the 25th
September, 1950, and was brought into force on the
same day by a notification made by the State Government in exercise of powers conferred on it by section
1(3) of the Act. Many of the proprietors and tenureholders
of
Zamindari estates took
proceedings
against the State of Bihar for appropriate orders
restraining the State Government from taking over
the estates under the provisions of the Act which they
claimed to be beyond the legislatiye competency of
the Bihar Legislature and otherwise void.
On the
12th March, 1951, a Special Bench of the Patna
High Court held that the Act was unconstitutional
on account of its contravention of article 14 of the
Constitution.
The State of Bihar appealed to this
Court.
Pending that appeal, the provisional Parliament passed the Constitution (First Amendment)
Act, 1951. The respondents in the main appeal took
proceedings in this .Court, contending that the
Act amending the Constitution w11s invalid. This
1953
Motipur
z.,.mindari
Co. Ltd.
v.
The State of
Biht1r
and A not her.
Da11J,
1968
Motipur
Za1nindari
Oo. Ltd.
v.
The Stato of
Bihar
and Another.
Da.s J.
722
SUPREME COURT REPORTS
[1953]
•
Court, however, on 5th October, 1951, upheld
the validity of the amending
Act.
On
6th
November, 1951, notifications were issued under
section 3 of the Bihar Act declaring that certain
Touzies belonging to the appellants specified in the
notification had passed to and become vested in the
State. Both the appellants made separate applications
to the Patna High Court under article 226 of the
Constitution praying for mandamus or suitable direc·
tion or' order restraining the respondent from taking
possession of their respective estates or tenures by
virtue of the said notifioations and for other ancillary
reliefs. The appeals filed by the State of Bi bar against
the order of the Special Bench declaring the Act to
be void came up for hearing before this Court and
this Court upheld the validity of the Act, except as
to a few provisions mentioned in the majority judg·
ment which were held to be severable.
Thereafter,
the two applications made by the two appellants
under article 226 before the Patna High Court came
up for bearing and were dismissed by a Bench of that
Court on the 22nd December, 1952.
The present
appeals have been filed with leave of the Patna High
Court against the said dismissal.
The question raised before the High Court was
whether the Act was, on its true construction, intended
to apply to Zamindari estates of companies incorpor·
ated under the Indian Companies Act. In support of
the appellants' contention that it was not, it was
urged- that the Bibar Legislature bad no authority
to legislate with respect to trading corporations or
non-trading corporations· whose objects were not
confined to one State. Reference was made to entries
43, 4411.nd 45 of List I to show that it was Parliament
alone which was authorized to make law with respect
to matters set forth in those entries.
'rbe contention
was that the Bibar Legislature in enacting the Act
invaded the Union field and so the Act was invalid.
'.1
1bis argument was sought to be reinforced by
reference to the provisions of t,)ie Act and the winding
up provisions of the Companies Act. The Patna. High
..
S.C.R.
SUPREME COURT REPORTS
723
Court overruled this contention and Mr. P.R. Das
appearing in support of these appeals has not
challenged this part of the decision of the Patna
High Court.
·
The main point urged by Mr. P.R. Das is that even
if the Bihar Legislature could make a law for acquiring Zamindari estates of incorporated companies
it did not, by the Act, in fact do so. Section 3 authorises the State Government to declare by notification that the estates or tenures of a proprietor
or tenure-holder have passed
to
and become
vested in the State. It will be recalled that it
was under this section that the State Government on
the 6th November, 1951, issued thenotificationswith
respect to the estates of the appellants situate within
the State.
Mr. P. R. Das's principal contention is
that the appellant companies do not come within the
terms "proprietor" or "tenure- holder" as defined by
the Act and consequently no part of their estates
were intended to be vested or did in fact vest in the
State. "Proprietor" -is defined by section 2(o) as
meaning a person holding in trust or owning for his
own benefit an estate or a part of an estate and includes
the heirs and successors-in-interest of a proprietor
and, where a proprietor is a minor or of unsound mind
or an idiot, his guardian, committee or other legal
curator.
Tenure-holder is defined by section 2 (r}
as meaning a person who has acquired from a
proprietor or from any tenure-holder a right to hold
land etc. The argument is that the word "person" in
the two definit'1ons referred to above does not, in the
context of the Act, include a company. It is conceded
that under section 4(40) of the B1har General Clauses
Act the word "person" would ordinarily iuclude a company, but it is urged by Mr. P.R. Das that the definitions
given in that section apply only where there is nothing
repugnant in the subject or context.
His contention
is that the definition of "proprietor" and "tenureholder" indicates that a company which owns Zamindaries is not covered by that definition. We are
unable to accept this contention. It is not disputed
9t
1958
Motipur
Zamindari
Co. Ltd.
v.
The State of
Bihar
and A not her.
Das J,
1958
Moti1n1,r
Za1nindar·i
Go, Ltd.
v.
The State of
Bihar
and Another.
Das J,
7'24
SUPREME COURT REPORTS
[1953]
that a company can own an estate or a part of an
estate and, indeed, the appellant companies are fighting these appeals only to protect the estates they
own.
Therefore, they CO!lle within the first part of
the definition.
The definition after stating what the
word means proceeds to state what else the definition would include under certain specified circumstances, namely, the heirs and successor-in-interest
etc.
The word "heir" certainly is inappropriate with
regard to a company, but there is nothing inappropriate in the comp:rny having a successor in-interest.
It is pointed out that there is
no provision
in the definition of proprietor to include the directors,
managing agents and, in case of winding up, the
liquidator of the company. This circumstance does
not appear to us to be a cogent reason for holdfog
that the word "proprietor" as defined does not cover a
company. It is to be noted that the agent or, in case
of insolvency, the official assignee or receiver of an
individual proprietor are alw not included in the
definition.
Reference to proprietor who is a minor or
of unsound mind or an idiot and his guardian etc.,
was obviously necessary because those proprietors
suffer from legal disabilities.
M~. P.H. Das refers us to various sections and
rules framed under section 43 of the Act to show that
only natural persons were intended to be affected by
the Act, because, he urges, the company is not competent to do the acts therem referred to.
It is not
disputed by Mr. P. R. Das that there is no difficulty
on the part of an incorporated company to do all
these acts by its directors or managing agents or other
officers empowered in that behalf by its articles of
association, but his contention is that tbe provi.'>ions
of the Indian Companies Act should not be imported
into the consideration of the provisions of hiK Act.
He relies prim~rily on the case of PharnMl'eutical
Society v. The London and Provincial Snpply Association, Limited(') where it was held that a corporation
('! (1880) L.R. 5 App. Cas. 857.
..
8.C.R.
SUPREME COURT REPOitTS
72S
did not come within the word "person" used in th~
Pharmacy Act, 1868 (31 & 32 Vic., Chapter 121).
Reliance was placed upon the observations of Lord
Selborne L.C. at page 863.
'The preamble to that
Act recited, amongst other things, that it was "expedient for the safety of the public &bat persons keeping
open shop for the retailing, dispensing or compounding of poisons, and persons known as chemists and
druggists should possess a competent practical knowledge of their business."
This clearly comtemplated
• persons skilled in matters pharmaceutical and not
impersonal corporate bodies which would
know
nothing about that particular business.
Indeed,
Ijord Blackburn in bis speech in the House of Lords
in the Pharmaceutical Society's case(') referred to this
preamble and observed at page 870 :-
"Stopping there, it is quite plain that those who
used that language were not thinking of corporations.
A corporation may in one sense, for all substantial
purposes of protecting the public, possess a competent
knowledge of its business, if it employs competent
directors, managers, and so forth. But it cannot
possibly have a competent knowledge in itself.
The
metaphysical entity, the legal 'person', the corporation, cannot possibly have a competent knowledge.
Nor, I think, Qan a corporation be supposed to be a
'person known as a chemist and druggist'."
His Lordship then referred to the provisions of
sections 1 and 15 of that Act and came to the conclusion that the word "person" in that Act . meant a
natural person.
'The effect of that case is that
whether the word "person'' in a sLatute can be treated
as including a corporation must depend on a consideration of the object of the statute and of the enactments passed with a vie\v to carry that object into
effect.
In view of the object of that Act as recited in
the preamble there could be no manner of doubt that
the word "person" in that Act could not possibly
include a corporation. Lord Selborne towards the
end of page 863 indicated, by reference to the 18th
•
(11 (1880) L.R. 5 App. Cas. s,57·
1958
Motipur
Zamind11ri
Go. Ltd.
v.
Th• Stat• of
Bih(l,·r
a.nd Another.
Da• J,
1958
Motipur
Zamindart
Co. Ltd.
v.
The State of
Bihar
a nil Another.
Das J.
726
SUPREME COURT REPORTS
[1953]
stiction, that the Legislature hy the word "person"
referred only to individual persons as it was clearly
repugnant to the subject of
tha~ Act to include a
corporation within the word "per.<on" as u~ed in that
Act.
Mr. 1'. R Das urges that the judgment of Lord
Selborne was founded on the fact that the corporation
could not come within the term "person" on the
ground that it could not make an application in
writing signed by it.
From this Mr. P. R. Das urges
that the necessary implication of this part of the
judgment of Lord Selborne is that it was not permissible to take tbe provisions of tbe Companies Act into
consideration for construing another Act. If that
were the implication of the speech of Lord Selborne,
with respect, we are unable to accept the same.
Indeed, one cannot think of a company unless one
has in view the provisions of tbe Companies Act, for
a company is the creature of the Companies Act.
Its
existence, powers and rights are all regulated by that
Act. 'fhe trend of the speeches of !·he noble Lords
in the case relied on by Mr. P. R. Das is that the
object of the particular Act uuder consideration was
entirely repugnant to the word "corpora.tion" being
included within the term "person" as used in that Act,
and as we apprehend it, that decision lays down
nothing beyond that.
In support of his contention
th~t a company
owning an estate was never intended to be affected by
the Act, Mr. P. R. Das draws our attention to the
winding up sections of the Indian Companies Act and
urges tha"t it is not possible to fit in the scheme of
winding u·p into the scheme of the Bihar Act. If
the Zamindari assets of the company are faken over
and compensation is paid by non-transferable bonds
it will, he contends, he impossible to a.pply the law
of winding up in case the company goes into liquidation.
'!.'here will, according to him, be conflict of
jurisdiction between the Court where the winding up
is ptoceeding, which may conceivably be in another
State, and the Bihr1t· Government and its officers.
We see no force in this contention.
U pou a
S.C.R.
SUPREME COURT REPOR'fS
727
notification being issued under section 3, the Zamindari estate will vest in the 8tate and the company will
cease to have auy interest in it.
Its only right will
be to receive compensation. In case of winding up
the liquidator will have to pursue the remedy provided
by this Act.
He or the company will be in no worse
position than the official assignee or official receiver
of an individual proprietor who may happen to become
insolvent in another State.
Finally, Mr. P.R. Das strongly relies on section 41
of the Act and contends that that section would be
wholly inapplicable to a company and that circumstance by itself would indicate that the Bthar Legislature did not intend that a company owning an
estate should be governed by this Act. A corporation,
it is true, cannot be made liable for treason, felony or
any misdemeanour involving personal violence or for
any offence for which the ouly penalty is imprisonment or corporal punishment.
(Halobury, 2nd J!;dition, Volume IX, article 5, p. 14).
Section 41 dot!s
not prescribe punishment by imprisonment only. Mr.
P. R. Das suggests that the infliction of imprisonment or fine would depend upon the gravity of the
offence and not on the character of the o·ffender.
This argument, however, would seem to run counter
to the opinion of Lord Blackburn set forth at pages
869-870 of the report of the vary case relied on by
Mr. P. R. Das. The reeent cases of Director of Public
Prosecutions v. Kent and Sussex Contractors Limited(
1
)
and Rex v. I.C.R. Haulage, Limited and Another(2)
seem to indicate that a corporation may be convicted even of an offence requiring an act of will
or a state of mind.
Apart, however, from the consideration whether a company may be held guil~y of
wilful failure or neglect, as to which we need not
express any definite opinion on this occasion, there
can be no difficulty in applying the provisions of
section 41 to the officers or agents of the company.
On.a notification under section 3(1) being published
the estate vests in the State. Section 4 sets out the
(r) [I9H] l K.B. 146.
(2) [r9HJ l K.B. 551.
1953
Motipu.r
Zamindari
Co. Ltd.
v,
The State of
Bihrir
and An.other.
Das J,
1958
Motipur
Zamindrtri
Co. Ltd.
v.
Th• St•te of
Bihar
and Another.
Das J.
728
SUPREME COURT REPORTS
[1953)
consequences of such vesting. Clause (g) of that
section empowers the Collector by written order served in the prescribed manner to require any person in
possession of such an estate or tenure or any part
thereof to give up possession of the same by a date
specified in the order and to take such steps or nse
such, force as may be necessary for securing compli:.noe with the said order. If any officer or agent
of the company in the possession of the estate wilfully
fails or ignores to comply with snob lawful order,
then surely he can be proceeded against under section
41.
Likewise, under section 40, the officers therein
mentioned are authorized at any time before or after
the date of vesting by a written order served in the
prescribed manner to require a proprietor or tenureholder or any other person in possession of such an
estate or tenure or any agents or employees of such
proprietor, tenure-holder or other person to produce
at a time and place specified in the order such documents, papers or regiiters or to furnish such information relating to such estate or tenure as such officer
may from time to time require for any of the purposes
of this Act. A wiliul failure or neglect to comply with
such o~der would clearly bring the recalcitrant officer
or agent of the company within the penalty provided
under section 41. Section 41. therefore, does not necessarily preclude Lhe application of the Act to incorporated companies.
It cannot be denied that a company is competent
to own and bold property.
'fhe whole object of the
impugned Act is thus stated by Mahajan J. in the
State of Bihar v. Kameshwar Singh\ 1):
"Now it is obvious that 0oncentration of big blocks
of land in the hands of a few individuals is contrary to
the principle on which the Constitution of [ndia is
based .. The purpose of the acquisition contemplated
by the impugned Act therefore is to do away with the
concentration of big blocks of land and means of
production in the hands of a few individuals and to
so distribute the ownership and contro! of the
(1) [1952] S.C.R. 889 at p. 941.
S.C.R.
SUPREME COURT REPORTS
729
material resources which come in the hands of the
State as to subserve the common good as best as
possible.
Iu other words, shortly put, the purpose
behind the Act is to bring about a reform in the land
distribution system of Bihar for the general benefit
'of the community as advised."
In view of this purpose there is no reason to
differentiate between au individual prnprietor and a
company which owns egtates or tenures. Indeed, there
is not only nothing repugnant in the. subject or
context of the Act which should prevent the inclusion of a company owning estate within the definition
of "proprietor", such inclusion is necessary iu order
to give full effect to the very object of the Act.
In Appeal No. 63 of 1953 Mr. P.R. Das raises an
additional point. namely, that the appellant company
in that appeal owns estates which are situate in
Purnea in the district of Bibar and in Maida in tbe
district of West Bengal but it bas to pay a single
Government revenue at Purnea. It is further alleged
that the appellant company h:i.s let out portion" of
the estates on Patni leases, e:i.ch of the Patnis comprising land situate both within and out,ide Bihar.
The acquisition of that part of the estate which is
situate in Bihar has made it difficult, if not impossible,
for the appellant company to pay its revenue or
recover its rent.
That part of the estate which is in
Bihar cannot be severed frnm the rest and therefore
the notification covering only the portion of the
estate situate in Bihar is invalid.
We do not think
there is any substance in this argument. As stated by
the High Court it is a simple case of apportionment
of the revenue and also apportionment of the rent.
The necessity for such apportionment cannot possibly
affect the validity of the notification.
For reasons stated above these appeals fail and
must be dismissed with co>.ts.
Appeals dismissed.
Agent for the appellants: R. R. Biswas.
Agent for the respondents: G. H. Rajadhyaksha,
1958
Motipur
Za1nindari
Co. Ltd.
v.
Tho State of
Bihar
and Another.
•