# STATE OF ASSAM AND ORS v. RAMESHWAR AGARWALA AND ORS

- **Citation:** [1971] 3 S.C.R. 306
- **Court:** Supreme Court of India
- **Decided:** 1971-01-06
- **Case number:** Civil Appeal No. 658 of 1967
- **Bench:** J. C. Shah, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-assam-and-ors-v-rameshwar-agarwala-and-ors-5189
- **Pages:** 4

## Headnote

. Assam Lend Revenue Regulations-Rule
40
framed thereunderDetermination by Government of premium
payable upon settlement of
land for "special cultivation"-!/ rail? of premium mast be fixed for
locality or can be fixed for tea garden-If premium can be fixed accordinR lo commercial value.
A
B
The first respondent applied to the Deputy Commissioner, Lakliimpur
C
,!
for sett~ment of a Tea Garden for "special
cultivaticn of
tea".
In
I"
March, 1964 the Government of Assam permitted the
settlement
on
payment of Rs. 3.86 lakhs as premi"m.
Upon the respondent failing to
make payment of the amount, the State Government directed the auction
of the tea garden. The first respondent thereafter moved a petition in the
High Court for a declaration inter alia that the State Goven,iment had
acted illegally in fixing the amount of premium. The High Court allow-
,F
ed the petition holding that the order flying the premium was not jn conD
~
formity with rule 40 framed under the Assam Land Revenue Regulations
which required the State Government to fix the rate of premium for a
particular locality; it did not empower the Government fo' nx''tlie ·premium payable by an intending holder in a particular case.
On appeal
to this Court,
HELD : The High Court• was in error in setting
aside
the
order
E
passed by the Government of Assam and in declaring that the offer to
,settle the tea garden on payment df the amount specified Rs. 3,86,000
T
was not in conformity with rule 40.
There was no warrant for the assumption made by the High Court
that in settling the premium to be fixed in respect of its own property,
the Government is bound to fix the premium generally in respect of a
region.
The Government is by the Act or the Rules not disqualified
from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary . a tea
garden may
appropriately be regarded as a locality within the meaning of Rule 40.
The rate of premium may be fixed by the State Government accd!:ding
to its commercial value.
C1v1L APPELLATE JuR1so1cnoN: Civil Appeal No. 658 of
1967.
Appeal frnm the judgment and order dated June 27, 1966 of
the Assam and Nagaland High C6urt in Civil Rule No. 296 of
1964.
Naimit Lal, for the appellants.
Sarjoo Prasad and S. N. Prasad. for the respondent_
F
G •
H
A
B
c
D
E
F
G
ASSAM V. AGARWALA (Shah, C.J.)
307

## Text

306
STATE OF ASSAM AND ORS.
v.
RAMESHWAR AGARWALA AND ORS.
January 6, 1971
[J. C. SHAH, C.J. AND K. S. HEGDE, J.J
. Assam Lend Revenue Regulations-Rule
40
framed thereunderDetermination by Government of premium
payable upon settlement of
land for "special cultivation"-!/ rail? of premium mast be fixed for
locality or can be fixed for tea garden-If premium can be fixed accordinR lo commercial value.
A
B
The first respondent applied to the Deputy Commissioner, Lakliimpur
C
,!
for sett~ment of a Tea Garden for "special
cultivaticn of
tea".
In
I"
March, 1964 the Government of Assam permitted the
settlement
on
payment of Rs. 3.86 lakhs as premi"m.
Upon the respondent failing to
make payment of the amount, the State Government directed the auction
of the tea garden. The first respondent thereafter moved a petition in the
High Court for a declaration inter alia that the State Goven,iment had
acted illegally in fixing the amount of premium. The High Court allow-
,F
ed the petition holding that the order flying the premium was not jn conD
~
formity with rule 40 framed under the Assam Land Revenue Regulations
which required the State Government to fix the rate of premium for a
particular locality; it did not empower the Government fo' nx''tlie ·premium payable by an intending holder in a particular case.
On appeal
to this Court,
HELD : The High Court• was in error in setting
aside
the
order
E
passed by the Government of Assam and in declaring that the offer to
,settle the tea garden on payment df the amount specified Rs. 3,86,000
T
was not in conformity with rule 40.
There was no warrant for the assumption made by the High Court
that in settling the premium to be fixed in respect of its own property,
the Government is bound to fix the premium generally in respect of a
region.
The Government is by the Act or the Rules not disqualified
from fixing the premium to be paid in respect of an individual tea garden.
In the absence of any indication to the contrary . a tea
garden may
appropriately be regarded as a locality within the meaning of Rule 40.
The rate of premium may be fixed by the State Government accd!:ding
to its commercial value.
C1v1L APPELLATE JuR1so1cnoN: Civil Appeal No. 658 of
1967.
Appeal frnm the judgment and order dated June 27, 1966 of
the Assam and Nagaland High C6urt in Civil Rule No. 296 of
1964.
Naimit Lal, for the appellants.
Sarjoo Prasad and S. N. Prasad. for the respondent_
F
G •
H
A
B
c
D
E
F
G
ASSAM V. AGARWALA (Shah, C.J.)
307
The Judgment of the Court was delivered by
Shah, C. J. On October 24, 1957 Rameshwar Agarwalahereinafter called 'the respondent' applied to the Deputy Commissioner, Lakhimpur, for settlement of a tea garden for "special
cultivation of tea". By order dated March 11, 196~ the Government of Assam permitted settlement of the tea garden for special
tea cultivation on payment of Rs. 3,86,QOS/-
a~ premium. The
respondent failed to pay the amount demanded.
The State of
Assam then put up the tea ,garden for auction. The respondent
moved a petition in the High Court of Assam for an order declaring tnat in fixing the amount of the premium at Rs. 3,86,008/-
the State acted illegally, and that the order was void and unenforceable at law because in fixing the ,amoun( of tile. premium the
State acted without jurisdiction and the order directing auction
of the tea garden for . not depositing the amount demanded was
also illegal. The High Court upheld the contention and ordered
the State of Assam-not to give effect to the order dated March 31,
1964 c8lling upon the respondent to pay the amount due within
two months of the order and the order dated November 26, 1964
directing that the tea garden be put up for auction. With certificate granted by the High Court, the State of Assam has appealed
to this Court.
The tea garden belonged to the State of Assam. The Government of Assam in the absence of 'any binding statutory provision,
could settle the tea garden on such commercial terms it
could reasonably obtain. The respondent applied to the Deputy
Commissioner for settlement of the tea garden and requesting the
State Govemm~nt for early fixation of the amount of premium.
When the premmm was fixed by the Government the respondent
protested, contending that the action of the State was illegal.
Before the High Court it was contended by the Respondent that
the power of the State Government to fix the premium for which
it could lease the tea garden was restricted by Rule 40 framed
under the Assam Land Revenue Regulations. The Rule reads :
"In addition to the land-revenue payable under rule
17 and value of the timber assessed under rule 37, an
applicant to whom a lease for special cultivation is
granted shall be liable to pay premium. The rate of
premium shall be fixed by the State Government from
time to time for .each locality.
*
*
*
*
"
The reasons which persuaded the High to upheld the plea
H
raised by the respondent may be set out in their own words :
"The only power which the Government has got, is
to fix the rate of premium under Rule 40 of the Rules
308
SUPREME COURT REPORTS
[1971] 3 S.C.R.
under the Land Revenue Regulation and the question
for us to consider is whether the order of the Government fixing the premium for settlement of this land for
special cultivation is an order in conformity with Rule
40.
.
.
.
.
In our opinion, what Rule 40 provides is to confer upon
the Government power to fix the rate of premium in
every case which shall be payable for the settlement and
it is only the Deputy Commisioner that is authorised to
settle the land. 'fhe whole pui:pose of Rule 40 is to
confer power on the Government to fix the rate of premium . which wiJl be· valid for a· particular loi:ality and
that the Deputy Commissioner has to make the settlement. He is given' the power to realise the premium
fixed . by the Government from time to time and to see
that no document of lease is issued before the premiuin
has been paid by the intending holder. But Rule 40
does empower, in our opinion, the State Government
to fix the amount of premium in the case of a particular
settlement in a particular locality.
.
.
.
.
.
.... The power under Rule 40 is a general power
for fixing the rate of premium for a particular locality
and the Legislature ~hen frami!lg the rules never inA
B
c
D
tended that the Government should be empowered to
E
fixing the total amount of premium payble by the intending holder.
In our opinon, therefore, the order
passed by the Government directing the authorities to
offer the land for settlement in case the petitioners pay
Rs. 3,86,000/- is not in conformity with Rule 40 and
this order cannot be given etfec!to."
F
The expression "locality" is not defined_.. in the Act or. in the.
Rules. We see no warrant for the assumpli~ made by the Hi¥h
Court· that in settling the premium to be fil:ed in respect of its
own property, the Government is bound to fix fue premium
generally in respect of a region. The Government is by the Act
·or the Rules not disqualified from: fixing the premium to be paid
G
in respect of an individual tea garden. In the absence of any
'indication to the contrary a tea garden may in our judgment be
appropriately. regarded as a locality witltin the meaning of Rule
40. The pcwer to settle a tea garden on payment of land revenue,
value of the timber and premium is to be exercised according to
the Rules. The rate of premium may be Jb:ed by the State GovH
. etnment according to its commercial value. In the absenc.e. of
any restriction imposed upon the State Government requmng
that a general rate shall be fixed covering a specified area larger
ASSAM v. AGARWALA .(Shah, C.J.)
309
A than a tea garden there is nothing which prohibts the State Government from fi1'ing the 1ate of premium having regard to the
commercial v.alue of the tea garden. In the pres.ent case the SubDivisional Officer reported 'that the price of the land of the Dirpai
tea garden be valued at Rs. [ 500 I - per big ha and on that basis
the State Government computed the premium to be paid in resB pect of the entire Jokai Tea Garden.
Fixation of. a rate of Rs. 500/ - per bigha in respect of the
entire area of the tea garden may be regarded as a premium fixed
for the locality of the tea garden. The matter rested entirely in
contract between the Respondent and the State Government.
There was an offer by the respondent for settlement of the tea
C garden. He.agreed to pay the land revenue payable under r. 17.
He also agreed to pay the value of the timber assessed under r. 37.
For settlement of the tea garden for special cultivation the respondent was also liable to pay premium. The quantum of liability to pay land revenue was governed by r. 17 and value of the
.timber was governed by r. 37. The liability to pay premium had
D to be fixed bY the State Government. In the absence of any
restrictioo placed by the Rules upon the power of the State Government, we do not think that the High Court had any jurisdiction to compel the State to enter into a contract to settle the tea
garden upon the respondent on payment of premium after deterE
F
mining a general rate for a region larger than the tea garden.
The High Court was in error in setting aside the order passed
by the Government of Assam and in declaring that the offer to
settle the land of the Dirpai Tea Garden on payment of
Rs. 3,86,008/- was not in conformity with r. 40. The High
Court also erred in directing that auction of the land for nonpayment of the premium shall be set aside.
The appeal is allowed and the petition filed by the respondent
will be dismissed. The respondent will pay the costs in this
Colll't--and in the High Court.
R.K.P.S.
Appeal a/lowed.