# STATE OF ANDHR.A PRADESH v. KANNAPALLI CHINNA VENKATA CHALAMAYYA ~ASTRI

- **Citation:** [1963] 1 S.C.R. 155
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Case number:** Civil Appeal No. 242 of 1960
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-andhr-a-pradesh-v-kannapalli-chinna-venkata-chalamayya-astri-2531
- **Pages:** 11

## Headnote

1 S.C.R.
SUPREME COURT REPORTS
STATE OF ANDHR.A PRADESH
v.
KANNAPALLI CHINNA VENKATA
CHALAMAYYA ~ASTRI
(B. _E. SINHA, c. J., P. B.
GAJENDRAGADKAit,
K. N. WANCHOO, N. RAJAGOPALA AYYANGAR
and T. L. VENKATARAMA AIYAR, JJ.)
Lana-lord and a Tenant-Estate-Reduction of rent of r!/oti
lanri-Whether unreasonable re~triction-Madras Estnte.s La,nd
(Reduction of Rent) Act, 1947 (Macl. XXX of 1947), s. 3 (4)-
0onstitution of India, Art. 19 (1) (f ).
The Respondent, the sole inamdar of village Chinnavcnkatapuram in the Parlakimidi Zamindari in the District of
Srikakulam filed a Writ Petition before the High Court challenging Inter alia the notification issued under s. 3 (4) of the
Madras Estates Land (Reduction of Rent) Act by which the
rents in respect of ryoti lands included in his Estate were
reduced. He also challenged the provisions vf the Act. The
High Court accepted the challenge to the notification on the
ground that the net income from rents was reduced to less than
25% of the original income and that the reduction was so substantial as to amount to an unreasonable restriction on the
respondent's right to hold property under Art. 19 ( l) ( f) of
the Constitution. On appeal by a certificate.
Held that the provisions of the Act were . valid as they
laid down ~easonable restrictions in the interest of ameliorating the conditions of tenants of ryoti land in 'Estates' who were
at a disadvantage compared to tenants of ryotwari lands.
Hela, further, that it is only in a theoretical case where
a land-holder would be virtually deprived of his income by
the reduction of rents that it can be said that the reduction
was unreasonable. By the reduction the income of the Respon·
dent was brought on a par with that of the highest prevailing
rents in ryotwari lands and so it cannot be said that the
reduction of rents made by the notification was violative
of the land holders' rights under Art. 19 (f ). The method
of comparing the rents prior to reduction with the rents
after reduction for the purpose of deciding the unreasonablness of the restriction was not sound as not humane landholders
but those who were charging unconscionable rents would
benefit thereby.
Ma ch 30.
l!J6:t
Stale of
Andhra Prt.dt•h
••
K-atinopalti Chinna
Ve:~Jeoln r:halamayya
Saslri
l1 o.nclzoo J.
156
SUPREME COURT REPORTS [1963]

## Text

1 S.C.R.
SUPREME COURT REPORTS
STATE OF ANDHR.A PRADESH
v.
KANNAPALLI CHINNA VENKATA
CHALAMAYYA ~ASTRI
(B. _E. SINHA, c. J., P. B.
GAJENDRAGADKAit,
K. N. WANCHOO, N. RAJAGOPALA AYYANGAR
and T. L. VENKATARAMA AIYAR, JJ.)
Lana-lord and a Tenant-Estate-Reduction of rent of r!/oti
lanri-Whether unreasonable re~triction-Madras Estnte.s La,nd
(Reduction of Rent) Act, 1947 (Macl. XXX of 1947), s. 3 (4)-
0onstitution of India, Art. 19 (1) (f ).
The Respondent, the sole inamdar of village Chinnavcnkatapuram in the Parlakimidi Zamindari in the District of
Srikakulam filed a Writ Petition before the High Court challenging Inter alia the notification issued under s. 3 (4) of the
Madras Estates Land (Reduction of Rent) Act by which the
rents in respect of ryoti lands included in his Estate were
reduced. He also challenged the provisions vf the Act. The
High Court accepted the challenge to the notification on the
ground that the net income from rents was reduced to less than
25% of the original income and that the reduction was so substantial as to amount to an unreasonable restriction on the
respondent's right to hold property under Art. 19 ( l) ( f) of
the Constitution. On appeal by a certificate.
Held that the provisions of the Act were . valid as they
laid down ~easonable restrictions in the interest of ameliorating the conditions of tenants of ryoti land in 'Estates' who were
at a disadvantage compared to tenants of ryotwari lands.
Hela, further, that it is only in a theoretical case where
a land-holder would be virtually deprived of his income by
the reduction of rents that it can be said that the reduction
was unreasonable. By the reduction the income of the Respon·
dent was brought on a par with that of the highest prevailing
rents in ryotwari lands and so it cannot be said that the
reduction of rents made by the notification was violative
of the land holders' rights under Art. 19 (f ). The method
of comparing the rents prior to reduction with the rents
after reduction for the purpose of deciding the unreasonablness of the restriction was not sound as not humane landholders
but those who were charging unconscionable rents would
benefit thereby.
Ma ch 30.
l!J6:t
Stale of
Andhra Prt.dt•h
••
K-atinopalti Chinna
Ve:~Jeoln r:halamayya
Saslri
l1 o.nclzoo J.
156
SUPREME COURT REPORTS [1963]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 242 of 1960.
Appeal from the judgment and order dated
September II, 19.57, of the Andhra Pradesh High
Court in Writ Petition No. 201 of 1952.
R. Ganapathy Iyer, T. V. R. Tatachari, D.
Venkatappaya Sastri and P. D. Menon, for the appellants.
'
K. Bhimasankaram and T. Satyanarana, for
the respondent.
1962. March 30. The Judgment of the Court
was delivered by ·
WANCHOO, J.-·This appeal on a certificate
granted by the Andhra Pradesh High Court raises
a question of the constitutionality of the Madras
Estates Land (Reduction of Rent) Act, No. XXX of
1947, as amended, (hereinafter referred to as the
Act) and a notification issued thereunder. The
brief facts necessary for present purposes are these.
The respondent was the sole inamdar of village
Chinnavenkatapuram in the Parlakimidi zamindari
in the district of Srikakulam.
The legislature
the composite State of Madras passed the Act,
which came into force from January 7, 1948, to
provide for the redu<Jtion of rents payable by ryots
in estates governed by the Madras Estates Land
Act, No. I of 1908, approximately to the level of
the assessments levied on lands in
ryotwari
arens in the neighbourhood and for the collection
of such rents exclusively by the State Government.
The Act applied to all estates as defined in s. 3 (2)
of the Madras Estates Land Act. Section 2 provided
for the appointment of a special officer for any
estate or estates for the purpose of recommending
fair and equitable rates of rent for the ryoti lands
in such estate or
estates and laid down the
procedure to be followed by the special officer for
1 S.C.R.
SCJPREME COURT REPORTS
157
such purpose, and gave power to the special officer to
determine after necessary enquiries the extent if
any to which the rates of rent payable for each
class of ryoti lands should in his opinion be reduced
and to fix the rates of rent payable for each class
of ryots after such reduction. Under s. 3, the
special officer had to submit1 a report after
completion of his inquiry to the State ·Government
on the two points mentioned above and after
considering the recommendations of the special
officer and the remarks of the Board of Revenue
thereon, the State Government was empowered
by order published in the gazette tp fix the rates
of rent in respect of each class of ryoti land in each
village in the estate, and the order so passed by
the State Government was to take effect from the
commencement of the Fasli year 1357. Section 3
(4) then provided for the recovery of rents so fixed
.by the State Government and the amount so
recovered in respect of each year, after deducting
therefrom the cost of such recovery as may be
determined according to the Rules to be framed
and also after deducting the peshkash, cesses and
other moneys due from the landholder to the State
Government., was to be paid to the landholder.
Section 3 (7) laid down that the landholder shall
not be entitled to collect rents thereafter. Sections
5 and 6 made special provisions with regard to
religious, educational and charitable institutions.
SeJtion 7 provided for th~ framing of rules and
sections 4, 8 and 9 made incidental provisions
which are however not material for our purposes.
In pursuance of the provisions of the Act, a
notifications was issued by the State Government
with respect to the ~state of the respondent fixing the
rates of rent for various classes of ryoti lands in the
estate. In-the case of wet and dry lands the rate
was reduced to half of the then existing rates a.nd in
the case of dry la.nd (when agraharam well water
1962
Stak of
Andhra Pradesh
v.
Kannapalli Chinna
Vmknt• Cholamai·yr '
Sastri
JV anchoo J.
1962
Stntenf
Andhra l:'r,·desh
..
Kon11opa!li Chin1.t;
V eid.:••ta Chfflama))'a
SaJtri
M',.ncho~ J.
158
SUPREME COURT REPORTS (1963)
was used) the rate was reduced to one-sixth of the
existing rat<»
Thereupon the respondent filed a
writ petition on :\farch 21. 1952, challenging the
above notification. The first challenge was on the
ground that the estate of the respondent was not
an estate within the meaning of the Madras Estates
Land Act and therefore the Act was not Bpplicable
to it. Secondly, it was contended that the reduction in the rents made by the notification was so
drastic as to resu It virtually in depriving the respondent of hiH right to hold and enjoy his property, as
the outgoings were far in excess of the income
after the n·duction in rents,
Consequently, the
notification amounted to an unreasonable restriction
on the right of the respondent to hold property
under Art. 19 (1) (f) of the constitution.
The petition was opposed on behalf of the
State and it was contended that it was incorrect to
say that the outgoings were more than the income
after the reduction of rents made by the impugned
notification. It was pointed out that after meeting.
the cess, the quit.-rent and ten per centum for collection chn.rgrs, the respondent would have a net
in<?ome of Rs. 603/- and the reduction in the circumstances could not be said to be so drastic as to
virtually deprive the respo~dent of his ·right to hold
property under Art. I 9 (1) (6).
When the matter came to be argued before
the High Court, three points were raised by the respondent, namely, (i) that the village in dispute was
not an estate, (ii) that even if it was an estate the
notification under the Act offended Art. (19) (1) (f)
of the Constitution because of the drastic nature of
the reduction, and (iii) that the Act itself was ultra
vim~ for the reason that it was contrary to the terms
of Art. a I of the Constitution and a, 299 of the
Government of India Act, 1935.
The third of these
oontention8, though it was not raised in the petition
by the respondent, was eventually referred to a Full
SUPREME COURT REPORTS
159
Bench and the question pnt to the Full Bench was
in these terms:-
"Whether the decision in Rajah of Bobbili
v. State o.f .11,fodras ( 1) insofar as that Madras
Act XXX of 1947 does not offend against section ~99 of the Government of India Act,
19:35, is good law?"
It mq,y be mentioned here that the Act was cballenc:ed soon after it was passed by the Rajah of Bobbili on various grounds one of which was that the
Act was bad as it contravened s. 299 (2) of the
Government of India Act. This challenge to the
Act was repelled by the Madras High Court in the
case of Rajah of Bobbili(1) and it was held that mere
reduction of rent was not acquisition of property
within the meaning of s. 299 (2) of the Government
of India Aet and the effect of the Act was held to
be that the landholder continued to be the owner of
the estate as before, hi~ title being left untouched.
It was further pointed out that it was the tenant
who was entitled to possession, the right of. the
landholder being only to recover rent and that right
again was left n"laffected by the legislation, the only
change being that the collection of rent was to be
m tde not b.Y the landholder but by the Government.
Further though the learned Judges in Rajah of
Bobbili's case (1) were apparently of opinion that the
acquisition con.templated bys. 299(2) of the Government of India Act was acquisition of title, they went
on to say that even asmrnirtg. that .s- 299 (2) of the
Government of India Act, covai:ed cases of possession, there was no such taking .of possession in the
case before them under the Act as would attract
that provision.
The reference to the Full Bench in the High
Court was due to the-ena.llenge to the narrow view
of the word "acquisition:' which was BR.id to have
b9en taken in Rajah of BobbiWs case (1) in view of
(I) ( 1952) I M.L.J. 17.f.
19 2
Stoteof
A dhro Pradesh
v.
I( annopal[1'. Chinna
Ventut1 Chnlamo:vyo
Saslri
Wanchoo J.
1962
St11k of
An.dhra I'tadesh
v.
K11nnapa1'i lhi1m4
v tfikata c1,~1Jom"!.v.Ya
Sastri
160
SUPREME COURT REPORTS [1963]
certain later decisions of this Court. Eventually,
however, the Full Bench held that even if a wider
interpret~tion was given to the word "acquisition"
as used ii:: s. 299(2) of the Government of India
Act, there was no deprivation of the property of the
landholder by the Act within the meaning of
s. 29n(2) and therefore the decision in the Rajah of
Bobbili's case (1 ) was still good la.w.
The Full
Bench also held that the provisions of the Act only
regulated the relation•hip of landholder and tenant
and as there was no acquisition by the Government
even in the wider meaning to be given to the word
"acquisition" in s. ~99(2) of the Government of
India Act, the Act was not hit by Art. 19(l}(f) and
was a reasonable restriction on the right to hold
property and in the interest of the general puhlic.
The Full Bench further held that, though prim£~ f acie
the reduction of rents to the ryotwari level could
not be said to he unreasonable, the view expressed
in the Raj1ih of Bobblli's case (1) that if in a particular case the result of the reduction of rates of
rent had the effect of total or substantial deprivation of the hndholder of his net income it would
offend Art. 19(1Xf) of the Constitution ..
After this opinion of the Full Bench, the matter
was again placed before a Division Bench for
final decision. At that stage it seems that the point
that the village in dispute was not an estate was
given up and the only point urged was that the
reduction was so drastic as to amount to an unreasonable restriction on the fundamental right to hold
property under Art.. 19( l)(f). The learned Advocate
General placed before the Bench tbe effect of the
reduction based on the notification of Jnne 27, 1950.
It was found that prior to the reduction the net income of the respondent was Rs. 3,875/-, and after
the reduction his net income was reduced to
Rs. 457/13/8. It was urged by the learned Advocate General that the respondent was getting the
rent at the highest rate prevalent in the ryotwari
(I) (1952) I M.L.J. 17+.
l S.C.R.
SUPREME COURT REPORTS
161
areas of the district and that it could not bo said
that the reduction of rates of rent to the level of
the highest ryotwari rate was an unreasonable restriction on the right of the respondent to .. hold
property.
The Bench, however, observed that
though ordinarily the reduction of
rates of
rent of the ryotwari level might be reasonable,
there might be circumstances in a particular
case to hold that the reduction was so drastic
that it would be an unreasonable restriction.
It was observed that the State might reduce
the
rent to such a level after deducting the legal
charges and the cost of collection fixed on an arbitrary basic that there might be nothing lef i to the
landholder. In such a case in the name of rf>gulation of rents and collection thereof the State took
away the grain and gave the husk to the landholder.
The Bench then added that though it was easy to
state the principle it was difficult to apply it to the
facts of each case. It then went on to consider
the circumstances under which it could be held that
reduction was so drastic that the landholder was
substantially deprived of his income, and was of
oninion that having regard to the object of the Act,
if the income of the landholder after reduction of
rents did not fall below 25 per centum of his previous income it could be held that the reduction was
not an unreasonable restriction on the right to hold
property enshrined in Art. 19 (I) (f). As in this
case, however, the income of the respondent foll far
below 25 per centum of the income which he was
getting before the reduction, the Bench held that
the notification was bad. Thereupon the State
Government asked for a. certificate to appeal to this
Court, which was granted; and that is how the
matter has come up before us.
So far as the constitutionality of the Act is
concerned, there was no serious .challenge to it by
the respondent. If one refers to the main provisons
9f tJie Act rela.tins. to reduction of ren~
1962
\
,\tate of
Andhra Pradesh
v.
K annopall( Chinna
Venkata Chalam•.J.111
Saatri
WanchooJ.
J96Z
St•te of
Andlhr• Pr•tle1h
••
K•nu.t.Jli ChiMn•
V 111.tm Chalom~yya
Ss.Jtri
162
SUPREME COURT REPORTS [1963)
which we ha.vo already set out above,
it will
appear that
the object of the Act was to
put a
check
on
rack· renting
in estate as
defined in the Madras Estat~s Land Act. As such
agricultural tenants formed a considerable group of
cultivators in the State, it was thought necessary to
ameliornte then· condition. The Act was therefore
enacted under the powers conferred on the provincial legislature under item 21, of List II of Schedule
VII to the Government of India Act dealing with
laud. It provided for reduction of ri>nt to the level
at which the rents prevailed in the neighbouring
area where there was ryotwari settlement. In these
circumstances it cannot possibly be said that the
reduction of the prevailing rents to the ryotwari
level was an unreasonable rest1iction on the right
of the landholder of an estate to hold property
·.mder Art. 19 (1) (f).
·we must therefore hold that
the Act is constitutional and lays down reasonable
restrictions on the right of the landholder to hold
his estate.
The attack based on reading the term "acquisition" in s. 299 of the Government of India Act, I 935
in the wid., sense of any interference with property
even when the title thereto does not pass to the
State, which was the point debated before the Full
Bench is no longer a Jive issue since the matter is
concluded against the respondent by the decision of
this Court in Oztrn
Dutt Sharma
v.
State of
Bihar (').
This brings us to the main point that has been
argued before us by counsel for the parties. It
is urged on behalf of the appellant that the High
Court was wrong in holding that where the reduction is such that the previous net income is reduced
below 25 per centum there would be an unreasonable restriction on the ri!fht to hold propPrty, merely
because of this circums\ance. It is said that the
fixation of this percentago at 25 per CPntum is mo~e
(ll [1962] 2 S. C.R. 292!
•
1 S.C.R.
SUPREME COURT REPORTS
163
or less arbitrary. In ~y case it means that where
a. landholder had been successful enough previously
to practise rack-renting as an art and to increase
the rents or his tenants unconscionably, he would
get protection because in such a case it was likely
that the reduction would be drastic and may even
result in the reduced net income being less than
25 per centum of the previous net income. On the
other hand in the case of a landholder who was a
humane person and did not increase his rents
unconscionably, the reduction of rents on the basis
of the same rate which might be used in the case of
the former landholder who was a rack-renter may
not be hit because in his case the reduction may not
be below 25 per centum.
80 it is urged that if the
reasonableness is to depend upon by how much the
previous net income is reduced after t.he reduction,
it will always work in favour of a landholder who
was a rack-renter even though the basis of reduction
may be on the same rates in the case of a rackrenting landholder and in the case of a humane landholder. Therefore, it is urged that if the reduction
is reasonable in the case of a humane landholder
because it is brought into line with the prevailing
rates of rent in the neighbouring a.reas under the
ryotwari settlement, there is no reason why such
reduction should not continue to be reasonable in
the case of the other landholder. The fact that in
one case the reduction may not be below 25 per
centum while in the other case it may go below 25
per centum will make no difference to the reasonableness of the reduction, for in either case the basis
of the reduction is the same. We a.re of opinion
that there is force in this argument and it must be
accepted. What we have to see is whether the Act
when it provides for reduction of rent proceeds on a
reasonable basis i.e. whether the reduction of rent
to the level of the prevailing rent for the same class
of land in the neigh'Jouring areas where ryotwari
$ettlement prevails is reasonable.
This in OU:f
l96B
Stale of
.Ar.dh1a Pradesh
v.
/(' annapalli Cliinna
Venkata Chaloma.»a
Sast1i
Wanchoa J,
J~62
Slt.ie of
.Andhr• Pr•dl" sh
••
Kon11·JP•lli Chinna
V11tkul12 Gilial2mayya
Ssitri
IV ancfloo ./.
164
SUPREME COURT REPORTS (1963]
opinion is a reasonable basis on which the rent in
estates covered by the :\iadras Estates Land Act
can be reduced. Once this basis is arcepted as
rea;unable, we fail tu sec how the ratio bet\<een
what the landholder wa~ getting before the reduction >J.nd what he gets after the reduction will make
what is per se reescnable
into an unreasonable
restriction. Theoretically it may be possible to say
that the reduction may be so much that nothing
may be left to the landholder. This is what the
respondent tried to make out in his writ petition,
for his case therein was that the rents were so far
reduced in his case that instead of getting an income
of J:ts. 3,875/- he would be getting no income at all
and wculd be actually suffering a net loss of
Rs. u53/- by his holding the estate after reduction
of rents,
This of course has been found by the
High Court to be incorrect and in actual fact the
landholder is left with a net income of Rs. 457 /-
and odd after the reduction in rent. Therefore.
except for the theoretical possibility where the
landholder may be left with nothing on reduction of
rents, it cannot be said from the mere fact that in
some cases the ratio of net income falls after reduction of rent as compared to the net income before
reduction below 25 per centum that the restrictions
imposed by the Act are unreasonable. Actually we
feel that there cannot possible be any case
where after the reduction there will be nothing left
to the landholder.
We cannot therefore agree with
the High Court that simply because in a partioular
case the net income >J.fter reduction falls below 25
per ceutum of the net income before reduction the
notification which results in such a position is an
unreasonable restriction on the right of the landholuer to hold his estate. As we have said already,
the ratio by which the net income will fall after
reduction will depend upon whether the landholder
whose rents are being reduced was a :rack-renter or
a humane person; in the case of a rack-renter tlm
f
>
I S.C.R.
SUPREME COURT REPORTS
165
fall may be heavier while in the case of a huma.ne
person the fall may be less.
But if the basis on
which the reduction is made is the same in both cases
and is reasonable, we see no rBai-mn for holding that
a notification which may in a given case result in a
fall of the net income which is even below 25 per
oentum of the previous net income would necessarily
be;bad as an unreasonable re~triction on the right
of the landholder to hold his estate. -It is important
in this connection to remember that the rent allowed to the respondent compares favourably with the
highest rent payable by the ryotwari tenants in the
locality. Therefore, the basis on which rents are
being reduced under the Act being good andreasonable the result of such reduction would not make
the notification in a particular case bad except
where that theoretical case is reached where there
is no income left to the landholder after reduction,
which in our opinion is impossible. We therefore
allow the appeal and setting aside the order of the
High Court dismiss the writ petition with costs
throughout.
Appeal allowed.
1961
Stct1 of
Andhrc Praiesh
v.
Kannapalli Chinna
Venkotd Ch~lamayyc
Saslri
WanchooJ.