# STATE OF TAMIL NADU v. MIS. AROORAN SUGARS LTD

- **Citation:** [1996] Supp. 8 S.C.R. 193
- **Court:** Supreme Court of India
- **Decided:** 1996-10-31
- **Case number:** Civil Appeal No. 134 of 1980
- **Bench:** Kuldip Singh, M.M. Punchhi, N.P. Singh, M.K. B Mukherjee, Saghir Ahmad
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-tamil-nadu-v-mis-arooran-sugars-ltd-14941
- **Pages:** 32

## Headnote

Tenancy and Land Laws :
Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, C
1961:
Section 18(3).
Acquisition of land and its vesting free from all encumbrances in
Government w.e.f date of publication of notification unde." S.18(1)- D
Amendment Act 39 of 1972 which came into force w.e.f 21-12-1972
amended Sch.III of Principal Act and reduced minimum multiples for
calculating compensation from 9 times to 2 times of not annual incomeNoiification under S.18(3) issued on 4-4-1973 declared an extent of land
of Company as surplus land and possession thereof taken over by
Government-Draft Compensation Assessment Roll published on 5-12- E
1973 determined amount payable at the rate of 2 times of net annual
income-Amendment Act 7 of 1974 vested surplus land in Government
w.e.f date of commencement of Act i.e. 1-3-1972, instead of from date of
publication of notification-Company filed writ petition before High Court
challenging Draft Compensation Roll on ground that in view of Amendment
Act 7 of 1974 antedating date of vesting from 4-4-1973 to 1-3-1972 it F
would be entitled to compensation by applying multiple o/9 times since on
1-3-1972 Amendment Act 39 of 1972 by which compensation amount was
reduced to multiple of 2 times did not come into force-Subsequently,
Amendment Act 25 of 1978 came into force on 1-3-1972-It effaced and
obliterated amendment introduced in S.18(3) as it stood prior to that G
amendment by reiterating that date of vesting of surplus land would be
date of publication notification under S.18(1 )-Held: Ss. 4, 5 and 6 of
Amendment Act 7 of 1974 in Principal Act because of which it would be
deemed that notification issued under S.18(1) of the Principal Act on 4-41973 was valid because of said notification-Lands declared surplus vested
in State under S.18(3) of Principal Act.
H
193
194
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A
Interpretation of Statutes:
Defect in Statute-Pointed out by High Court-Removal of-By
effacing and obliterating earlier amendment retrospectively-With aid of
legal fiction-Validity of-Held: Amending Act had taken away th.e
substratum and basis or judgment of Court-Hence, measurers adopted by
B Amending Act valid.
c
D
Legal Fiction-Mode of interpretation-Reiterated.
Constitution of India, 1950: Article 14.
Retrospective Legislation-Held: Legislature had power to amend,
delete or obliterate a statute or provision retrospectively unless such
legislative exercise was in violation of Article 14.
Practice and Procedure :
High Court-Orders and directions of-High Court's order, which
was in nature of execution order, simply directed State Government to comply
with its earlier order and direc.tion given in connected writ petition-Such
earlier order set aside by Supreme Court-Held: when that earlier order
itself was set aside by Supreme Court, direction given in execution order
E would be of no consequence.
The respondent, a public limited company, was engaged in
composite and integrated activity of raising sugarcane on its land
and crushing it in its sugar factory. Section 18(3) of the Tamil Nadu
Reforms (Fixation of Ceiling on Land) Act, 1961 provided for
F acquisition of land and vesting thereof free from all encumbrances in
the Government w.e.f. date of publication of notification under Section
18(1) of the Principal Act. The minimum compensation for excess
land vesting in the Government was 9 times of the net annual income.
When the respondent filed its return on 6-4-1972 under Section 8 of
G the Principal Act it was entitled to compensation at the rate of 9
times of the net annual income. However, the Tamil Nadu Land
Reforms (Fixation of Ceiling on Land) Fourth Amendment Act, 1972
(Act 39 of 1972) which came into force w.e.f 21.12.1972 amended
Schedule III of the Principal Act reducing the minimum multiples
for calculating compensation from 9 times to 2 times of the net annual
H income. A notification under Section 18(1) of the Principal Act was
..
....
STATEOFT.N. v. AROORAN SUGARS LTD.

## Text

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STATE OF TAMIL NADU
A
v.
MIS. AROORAN SUGARS LTD.
OCTOBER 31, 1996
[KULDIP SINGH, M.M. PUNCHHI, N.P. SINGH, M.K.
B
MUKHERJEE AND SAGHIR AHMAD, JJ.]
Tenancy and Land Laws :
Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, C
1961:
Section 18(3).
Acquisition of land and its vesting free from all encumbrances in
Government w.e.f date of publication of notification unde." S.18(1)- D
Amendment Act 39 of 1972 which came into force w.e.f 21-12-1972
amended Sch.III of Principal Act and reduced minimum multiples for
calculating compensation from 9 times to 2 times of not annual incomeNoiification under S.18(3) issued on 4-4-1973 declared an extent of land
of Company as surplus land and possession thereof taken over by
Government-Draft Compensation Assessment Roll published on 5-12- E
1973 determined amount payable at the rate of 2 times of net annual
income-Amendment Act 7 of 1974 vested surplus land in Government
w.e.f date of commencement of Act i.e. 1-3-1972, instead of from date of
publication of notification-Company filed writ petition before High Court
challenging Draft Compensation Roll on ground that in view of Amendment
Act 7 of 1974 antedating date of vesting from 4-4-1973 to 1-3-1972 it F
would be entitled to compensation by applying multiple o/9 times since on
1-3-1972 Amendment Act 39 of 1972 by which compensation amount was
reduced to multiple of 2 times did not come into force-Subsequently,
Amendment Act 25 of 1978 came into force on 1-3-1972-It effaced and
obliterated amendment introduced in S.18(3) as it stood prior to that G
amendment by reiterating that date of vesting of surplus land would be
date of publication notification under S.18(1 )-Held: Ss. 4, 5 and 6 of
Amendment Act 7 of 1974 in Principal Act because of which it would be
deemed that notification issued under S.18(1) of the Principal Act on 4-41973 was valid because of said notification-Lands declared surplus vested
in State under S.18(3) of Principal Act.
H
193
194
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A
Interpretation of Statutes:
Defect in Statute-Pointed out by High Court-Removal of-By
effacing and obliterating earlier amendment retrospectively-With aid of
legal fiction-Validity of-Held: Amending Act had taken away th.e
substratum and basis or judgment of Court-Hence, measurers adopted by
B Amending Act valid.
c
D
Legal Fiction-Mode of interpretation-Reiterated.
Constitution of India, 1950: Article 14.
Retrospective Legislation-Held: Legislature had power to amend,
delete or obliterate a statute or provision retrospectively unless such
legislative exercise was in violation of Article 14.
Practice and Procedure :
High Court-Orders and directions of-High Court's order, which
was in nature of execution order, simply directed State Government to comply
with its earlier order and direc.tion given in connected writ petition-Such
earlier order set aside by Supreme Court-Held: when that earlier order
itself was set aside by Supreme Court, direction given in execution order
E would be of no consequence.
The respondent, a public limited company, was engaged in
composite and integrated activity of raising sugarcane on its land
and crushing it in its sugar factory. Section 18(3) of the Tamil Nadu
Reforms (Fixation of Ceiling on Land) Act, 1961 provided for
F acquisition of land and vesting thereof free from all encumbrances in
the Government w.e.f. date of publication of notification under Section
18(1) of the Principal Act. The minimum compensation for excess
land vesting in the Government was 9 times of the net annual income.
When the respondent filed its return on 6-4-1972 under Section 8 of
G the Principal Act it was entitled to compensation at the rate of 9
times of the net annual income. However, the Tamil Nadu Land
Reforms (Fixation of Ceiling on Land) Fourth Amendment Act, 1972
(Act 39 of 1972) which came into force w.e.f 21.12.1972 amended
Schedule III of the Principal Act reducing the minimum multiples
for calculating compensation from 9 times to 2 times of the net annual
H income. A notification under Section 18(1) of the Principal Act was
..
....
STATEOFT.N. v. AROORAN SUGARS LTD.
195
published on 4-4-1973 declaring an extent of land of respondent as A
" surplus land and possession thereaf taken over by Government. The
Draft Compensation Ass~ssment Roll was published on 5-12-1973
determining the amount payable to the respondent in respect of the
surplus lands at the rate of 2 times the net annual income.
Subsequently, the Tamil Nadu Land reforms (Fixation of Ceiling on
Land) Sixth Amendment Act, 1972 (Act 7 of 1974) amended Section B
18(3) of the Principal Act by which the surplus land was to vest in the
State Government w.e.f. from the date of commencement of that
Act. i.e.1-3-1972, instead of from the date of publication of the
notification.
The respondent filed a writ petition before the High Court C
challenging the Draft Compensation Assessment Roll on the ground
that in view of the Amendment Act 7 of 1974 antedating the date of
vesting from 4-4-1973 to 1-3-1972 the respondent was entitled to
compensation by applying the multiple of 9 times of the net annual
income instead of the multiple of 2 times since on 1-3-1972 the
Amendment Act 39 of 1972 by which the compensation amount was D
reduced to the multiple of 2 times had not come into force. The High
Court allowed the writ petition. Being aggrieved the appellant-State
preferred an appeal against this decision of the High Court.
Thereafter, the Tamil Nadu Land Reforms (Fixation of Ceiling E
on Land) Amendment Act, 1978 (Act 25 of 1978) came into force
w.e.f. 1-3-1972. It effaced and obliterated the amendment introduced
in Section 18(3) of the Principal Act by Act 7 of 1974 and restored
parts of Section 18(3) of the Principal Act as it stood prior to that
amendment by reiterating that the date of vesting of the surplus land
would be the date of publication of the notification under Section F
18(1) of the Principal Act.
The respondent filed a writ petition before the High Court
challenging the validity of Act 25 of 1978 which was allowed. Being
aggrieved the appellant-State preferred the present appeal.
On behalf of the appellant-State it was contended that since the
appellant had filed an appeal against the order of the High Court
directing payment of compensation to the respondent applying
provisions of Act 7 of 1974, after coming into force of Act 25 of 1978
G
the basis of the ~foresaid judgment had been taken away as such the H
196
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A respondent could not claim compensation by applying the multiple
of9 times; and that the provisions of Act 25 of1978 being constitutional
and valid, the High Court should have dismissed the writ petition
challenging the validity of Act 25 of 1978.
B
c
Allowing the appeal, this Court
HELD : I.I. The power of the legislature to amend, delete or
obliterate a statute or to enact a statute prospedively or retrospectively
cannot be questioned and challenged unless the court is of the view that
such exercise is in violation of Article 14 of the Constitution.1209-E-FI
State of Gujarat and Anr. v. Raman Lal Keshav Lal Soni Ors., 11983)
2 SCR 287, T.R. Kapur v. State of Haryana, ll 986) Supp. SCC 584 and
Union of India v. Tushar Ranjan Mohanty, 11994) 5 SCC 450 relied on.
1.2. It is open to the legislature to remove the defect pointed by
D the Court or to amend the definition or any other provisio11 of the
Act in question retrospectively. In this process it cannot be said that
there has been an encroachment by the legislature over the power of
the judiciary. A court's directive must always hind unless the conditions
on which it is based are so fundamentally altered that under altered
circumstances such decisions could not have been given. This will
E include removal of the defect in a statute pointed out in the judgment
in question, as well as alteration or substitution of provisions of the
enactment on which such judgment is based, with retrospective effect.
This is what has happened in the present case. 1213-C-D]
Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, 11969) 2
F SCC 283; West Ramnad Electric Distribution Co. Ltd. v. State of Madras,
11963) 3 SCR 41; Tirath Ram Rajindra Nath v. State of U.P., 11973) 3
SCC 585; Krishna Chandra Gangopadyaya v. Union of India, 11975) 2
SCC 302; Hindustan Gum and Chemicals Ltd. v. State ofHaryana, 11985)
4 SCC 124; Utkal Contractors and Joinery (P) Ltd. v. State of Orissa,
G 11987) Supp SCC 751; D. Cawasji Co. v. State of Mysore, 11984) Supp
SCC 490; Bhubaneshwar Singh v. Union of India, 11994) 6 SCC 77;
Government of Andhra Pradesh and Anr. v. Hindustan Machine Tools
Ltd., 11975) 2 SCC 274 and Sunder Dass v. Ram Prakash, 11977) 3 SCR
60, relied on.
H
2.1. The provisions of the Tamil Nadu Land Reforms (Fixation
STA TE OF T.N. v. AROORAN SUGARS LTD.
197
of Ceiling on Land) Amendment Act, 1978 (Act 25 of 1978) do not A
purport to effect any vested or acquired right. It only restores the
position which existed when the Tamil Nadu Land Reforms (Fixation
of Ceiling of Land) Act, 1961 was in force. It simply nullifies the Tamil
Nadu Land Reforms (Fixation of Ceiling on Land) Sixth Amendment
Act, 1972 (Act 7of1974) which had made amendments in the Principal
Act after notification had been issued under Section 18(1) and vesting B
had taken place under Section 18(3) of the Principal Act as it stood
prior to enactment Act 7of1974. By Act 7 of 1974 futile attempt had
been made by introducing different amendments. In this process not
only it created anomaly in the Principal Act, but nothing purposeful
was achieved. It is true that because of the amendments introduced by
that Act 7 of 1974, the respondent could urge before the High Court C
that as the vesting had taken place on 1-3-1972, in spite of amendment
Act 39of1972 which had reduced the multiple from 9 times to 2 times
of the net annual income with effect from 21-12-1972 the respondent
was entitled to compensation to be worked out on basis of 9 times of
the net annual income. But on this ground the provisions of Act 25 of
1978 cannot be held to be violative of Article 14 of the Constitution and D
as such ultra vires. Once the provisions are held to be legal and valid,
then the wish and desire of the legislature has to be given full effect and
to its logical end. (210-E-H, 211-A-BJ
2.2. This Court shall be justified in examining the judgment of E
the High Court on the writ petition of the respondent which treated
Act 7 of 1974 as never enacted or was it existence. As that judgment
was solely based on the amendments introduced by Act 7 of 1994,
once such amendments have been effaced retrospectively, there is no
escape from the conclusion that the substratum and basis of that
judgment has been taken away. If those amendments so introduced F
have been effaced by Act 25 of 1978 with retrospective effect saying
that it shall be deemed that no such amendments had ever been
introduced in the Principal Act, then full effect has to be given to the
provisions of the later Act unless they are held to be ultra vires or
unconstitutional. (213-E I
G
2.3. When a statute creates legal fiction saying that something
shall be deemed to have been done which in fact and truth has not
been done, the Court has to examine and ascertain as to for what
purpose and between what persons such a statutory fiction is to be
resorted to. Thereafte1· courts have to give full effect to such a statutory H
198
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
· A fiction and it has to be carried to its logical conclusion. (208-B,C]
State of Bombay v. Pandurang Vinayak, (1953] SCR 773; Chief
Inspector of Mines v. Karam Chand Thapar, ]1962] 1 SCR 9; JK Cotton
Spinning and Weaving Mills Ltd. v. Union of India, (1988] 1 SCR 700;
M Venugopal v. Divisional Manager, Life Insurance Corporation of India,
B (1994] 2 SCC 323 and Harish Tandon v. Additional District Megistrate
Allahabad, (1995] 1 SCC 537, relied on.
c
East End Dwellings Co. Ltd. v. Finsbury Borough Council, ( 1952]
AC 109, referred to.
3.1. In view of Sections 4, 5 and 6 of Act 25 of 1978 which cannot
be held to be unconstitutional, there is no escape from conclusion
that the provisions which had been introdu<:ed in the Principal Act
by Act 7 of 1974 have been effaced and courts have to proceed as if
they had never been introduced in the Principal Act. As a corollary it
D has to be held that un1er the amendment Act 39 of 1972 the
compensation amount payable for the surplus land under Schedule
III to the Act was reduced from 9 to 2 times of the net annual income
w.e.f. 21-12-1972. Notification under Section 18(1) of the Principal
Act declaring an extent of land of the respondent-company as surplus
was issued on 4-4-1973 after coming into for.ce of amended Act 39 of
E 1972 aforesaid and because of the notification dated 4-4-1973 the
surplus lands vested in the State Government in view of Section 18(3)
of the Principal Act as it stood on that date. Thereafter, the Draft
Assessment Roll had to he published applying the rate of 2 times of
the net annual income. (220-E-G]
F
G
Madan Mohan Pathak v. Union of India, (1978] 2 SCC 50, Janapada
Sabha Chhidwara v, The Central Provinces Syndicate Ltd. and Anr., (1970)
l SCC 509 and The Municipal Corporation of the City of Ahmedabad
and Anr. v. The New Shrock Spg. and Wvg Co. Ltd, (1970] 2 SCC 280,
held inapplicable.
A. V. Nachane and Anr. v. Union of India, (1982] 2 SCR 246 and
D.J Bahadur, referred to.
United Provinces v. Atiqa Begum and State of Tamil Nadu v. M
H Rayappa Gounder, cited.
,
STATE OF T.N. v. AROORAN SUGARS LTD. [N.P. SINGH, J.]
199
3.2. In view of the provisions of Sections 5(b) and 6(a) of the A
notification which was issued on 4-4-1973 under Section 18(1) of the
Principal Acts.hall be deemed to be valid and shall.have the effect of
vesting the lands in question in the State Government under Section
18(3) of the Principal Act w.e.f. 4-4-1973. 1221-D,EI
3.3. The High Court by its order which was in the nature of B
execution order simply directed the State Government to comply with
its earlier order and direction given in a connected writ petition. When
that earlier order itself was set aside by this court, the direction given
in the execution order shall be of no consequence. [222-E,FJ
3.4. It is, therefore, not possible to accept the stand that Sections C
4, 5 and 6 of Act 25 of 1978 shall not revive the notification dated 44-1973 which stood exahuasted and a fresh notification dated 4-41973 had to be issued, even ifthe different provisions of Act 7of1974
shall be deemed to have been obliterated. [220-H, 221-AJ
4. There is no necessity to decide as to whether Act 25 of 1978 D
has the protection of Articles 31-A, 31-B and 31-C of the Constitution.
1224-D]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 134 of
1980 Etc.
From the Judgment and Order dated 8.10.76 of the Madras High
Court in W.P. Nos. I464 and 346of1974.
K.K. Venugopal, A.K. Ganguly, V. Krishnamurthy, V.
E
Ramasubramaniam, P. Murugan, P.R. Seetharaman and A. Mariarputham F
for the Appellant.
F.S. Nariman, Subhash Sharma, N. Sriprakash, E.R. Kumar and
P.H. Parekh for the Respondent
The Judgment of the Court was delivered by
N.P. SINGH, J.
G
The State of Tamil Nadu is the appellant in these appeals. Civil
Appeal No.134 of 1980 has been filed against the judgment of the High H
200
SUPREME COURT REPORTS [ 1996] SUPP. 8 S.C.R.
A Court of Madras in Writ Petition 1464 of 1974, whereas Civil Appeal
Nos. 352-354 of 1980 have been filed against the judgment of the same
High Court in Writ Petition 2341-2343 of 1978. All the Writ Petitions
had been filed on behalf of the respondent which were allowed by the
High Court.
B
The respondent, a public limited Company which owned aR<I
possessed 3421.14 acres of land, was engaged in composite and integrated
activity of raising sugarcane on the aforesaid land and crushing it in its
sugar factory. The Tamil Nadu Reforms (Fixation of Ceiling on Land)
Act, 1961 (Act 58of1961), (hereinafter referred to as the Principal Act)
w?s published in the Tamil Nadu Government Gazette on 2.5.1962.
C According to the said Act, a ceiling of 30 standard acres of agricultural
land was fixed as the maximum holding. Under Section 18(1) of the
Principal Act, the surplus land has to be notified as required for public
purposes and on such publication in view of Section 18(3) of the Act land
specified in the notification shall be deemed to have been acquired for a
public purpose and shall vest in the Government free from all encumbrances
D with effect from the date of such publication and all right, title and interest
of all persons in such land shall be deemed to have been extinguished. The
relevant part of Section 18 of the Act is as foll.ows:-
E
F
G
H
18. Acquisition of surplus land. ( l) After the publication of
the final statement under section 12 or 14, the Government
shall, subject to the provisions of sections 16 and 17, publish
a notification to the effect that the surplus land is required
for a public purpose.
~) ···································································
(3) On the publication of the notification under sub-section
( l ), the land specified in the notification together with the
trees standing on such land and buildings, machinery plant
or apparatus, constructed, erected or fixed OR such land and
used for agricultural purposes shall, subject to the provisions
of this Act, be deemed to have been acquired for a public
purpose and vested in the Government free from all
encumbrances with effect from the date of such publication
and all right, title and interest of all persons in such land
shall, with effect from the said date, be deemed to have been
extinguished:
..
STATEOFT.N.v.AROORANSUGARSLTD. [N.P.SlNGH,J.]
201
Provided that where there is any crop standing on such land A
on the date of such publication, the authorized officer may,
subject to such conditions as may be prescribed, permit the
harvest of such crop by the person who had raised such crop.
Section 50(1) of the Act provides for payment of amount at the rates
specified in Schedule lil thereto, to person whose right, title or interest in 8
any land is acquired by the Government.
Tamil Nadu Land Reforms (Reduction of Ceiling on Land) Act 17
of 1970, reduced the ceiling from 30 to 15 standard acres with effect from
15.2.1970. Under the Principal Act there was provision for grant of
exemption to the lands held by sugar factories in excess of the ceiling C
area. This provision was deleted by Tamil Nadu Amendment Act 41 of
1971, which came into force from 15.1.1972. Because of such amendment
even the sugar factories in general could not hold land in excess of 15
standard acres. The respondent filed its return under Section 8 of the
Principal Act on 6.4.1972. The Additional Authorised Officer (Land
Reforms), Tiruvarur, published the draft statement under Section 10(1) of D
the Principle Act on 19.4.1972. The minimum compensation payable for
excess lands vesting in the Government was 9 times of the net annual
. income. As such when the respondent filed its return on 6.4.1972, it was
entitled to compensation at the rate of 9 times of the net annual income.
However, the Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Fourth Amendment Act, 1972 (Act 39 of 1972) which came in force with E
effect from 21.12.1972 amended Schedule lil of the Principal Act reducing
the minimum multiples from 9 times to 2 times. The said Amending Act
39 of 1972 purported to reduce the multiple of compensation which was
payable in respect of lands which vested in the Government after
21.12.1972. A notification under Section 18( I) of the Principal Act was F
published on 4,4.1973 declaring as surplus an extent of 3414.87 acres of
land held by the respondent. Possession over such excess land were taken
over by the State Government between 6.4.1973 and 26.4.1973. The Draft
Compensation Assessment Roll was published by the State Government
on 5.12.1973 determining the amount payable to the respondent in respect
of the surplus lands applying the rate of 2 times the net annual income.
G
On 15.2.1974, the Tamil Nadu Land Reforms (Fixation of Ceiling
on Land) Sixth Amendment Act 1972 (Act 7 of 1974) was published in
the Tamil Nadu Government Gazette. Sub-section (2) of Section 3 of Act
7 of 1974 amended sub-section (3) of Section 18 of the Principal Act on
and from 1.3.1972. The relevant part thereof is as follows:-
H
202
A
B
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
"3(2) in section l 8 of the principal Act,-
(a) in sub-section (3), for the words "with effect from the
date of such publication'', the words "with effect from
the date of the commencement of this Act,'' had been
substituted;
(b)
~) ..................................................................... ·
The effect of substitution of sub-section (3) ofSection 18 of the
C Principal Act shall be that whereas under the original sub-section (3) of
Section 18 of the Principal Act only on publication of the notification
under sub-section (I) of Section 18, the land SJ"cified in the notification
together with the trees standing on such land mid buildings, machinery
plant etc., was deemed to have been acquired for a public purpose and
D vested in the Government free from all encumbrances 'with effect from
the date of such publication'; because of the substitution of sub-section
(3) of Section 18 of the Principal Act by Act 7 of 1974 the lands in
question shall deemed to have vested in the Gov1!rnment 'with effect from
the date of the commencement' of Act 7 of 1974, i.e. with effect from
1.3 .1972. It can be said that as sub-section (3) of Section 18 stood prior to
E amendment by Act 7 of 1974 on publication of the notification under
Section 18(1), the vesting of the respondent's sugarcane land in the State
Government had taken place with effect from 4.4.1973, but in view of the
substituted sub-section (3) of Section 18 by Act 7 of 1974, it shall be
deemed that the vesting of the excess lands took place with effect from
1.3.1972. In Section 3 of the Principal Act by Act 7 of 1974 a new subF section (3-A) was also introduced which is as follows:-
G
H
"(3-A) (a) Every person who, after the date of the
commencement of this Act, was in possession of, or deriving
any benefit from the property vested in the Government under
sub-section (3) shall be liable to pay to the Government, for
the period, after such commencement, for which he was in
such possession or deriving such benefit, an amount as
compensation for the use, occupation or enjoyment of that
property as the authorised officer may fix in the prescribed
manner. Such officer shall take into consideration such facts
as may be prescribed.
..
-
STATE OF T.N. v. AROORAN SUGARS LTD. (N.P. SINGH, J.]
203
(b) Any amount payable to the Government under clause (a) A
shall be recoverable as arrears of land revenue."
According to the respondent, in view of the amendment introduced
by Act 7of1974, antedating the date of vesting from 4.4.1973 to 1.3.1972
the respondent was entitled to the payment applying the multiple of 9
times of the net annual income instead of multiple of 2 times which was B
introduced by aforesaid Act 39 of 1972 with effect from 21-12-1972.
Writ Petition No.1464 of 1974 was filed on behalf of the respondent
challenging the Draft Compensation Assessment Roll aforesaid, before
the High Court which was admitted by the High Court.
It may be pointed out that the learned counsel appearing for the C
appellant-State, could not explain as to what was the purpose of enacting
Act 7 of 1974 aforesaid and what object it purported to achieve. He simply
stated that letter the legislature itself restored the original position by
enacting Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Amendment Act 78 (Act 25 of 1978). Section 4 of that Act is as follows:
"4. Tamil Nadu Act 58 of 1961, as subsequently modified,
to have effect subject to modifications-The principal Act,
shall, on and from the !st day of March 1972, have effect as
if,-
(I) in section 18 of the principal Act,-
(a) in sub-section (3), for the words "with effect from the
date of the commencement of this Act", the words "with
effect from the date of such publication" had been substituted;
(b)
( c) sub-section (3-A) had been omitted.
"
In view of the Section 4 aforesaid, in sub-section (3) of Section 18
of the Principal Act the words "with effect from the date of such
publication" was again substituted for the words "with effect from the
date of commencement of this Act" which had been introduced by Act 7
D
E
F
G
of 1974. Sub-section (3-A) which had been introduced by Act 7 of 1974 H
204
SUPREMECOURTREPORTS [1996] SUPP. 8 S.C.R.
A was also omitted. Sections 5 and 6 of Act 25 of 1978 which are relevant
provided:
B
c
D
E
F
G
H
6.
"5. Certain provision of Tamil Nadu Act 7 of 1974 not to
have effect-
(I) Not withstanding anything contained in the Tamil Nadu
Land Reforms (Fixation of Ceiling on Land) Sixth
Amendment Act, 1972 (Tamil Nadu Act 7 of 1974)
(hereinafter in this section referred to as the 1972 Act), or in
any judgment, decree or order of any court or other authority,
sub-section (2) of section 3 of the 1972 Act shall be omitted
and shall be deemed always to have been omitted and
accordingly the modifications made to section 18 of the
principal Act by the said sub-section (2),-
(a) shall be deemed never to have been made and the provisions
of the said section 18 of the principal Act as they stood prior
to the said modifications shall continue in force and shall be
deemed always to have continued in force; and
(b) shall be deemed never to have had the effect of vesting in
the State Government the surplus lands specified in any
notification published under sub-section (I) of the said section
18 of the principal Act on or after the 2nd May 1962 and
before the date of publication of this Act in the Tamil Nadu
Government Gazette, from a date earlier to the date of the
publication of the notification under the said sub-section
(I) and shall be deemed always to have had the effect of
vesting in the State Government such surplus lands, only
with effect from the date of the publication of such
notification. (2) Anything don<' or any action taken under
the principal Act in pursuance of the provisions of sub-section
(2) of section 3 of the 1972 Act, shall be re-opened and
determined in accordance with provisions of the principal
Act, as modified by this Act.
Vesting of certain surplus lands and validationNotwithstanding anything contained in any judgment, decree,
or order of any court or other authority,
STA TE OF T.N. v. AROORAN SUGARS LTD. [N.P. SINGH, J.]
205
(a) where before the date of publication of this Act in the A
Tamil Nadu Government Gazette, a notification under subsection (I) of section 18 of the principal Act has been
published, the surplus land specified in s~ch notification shall
be deemed to have vested in the State Government, with
effect from the date of such publication only, and accordingly
the provisions of the principal Act, as modified by section 4 B
of this Act, shall for all purposes apply and be deemed always
to have been applied in respect of such surplus lands so vested;
and
(b) all acts done and proceedings taken by any officer or
authority under the principal Act, on the basis that C
compensation in respect of surplus lands referred to in clause
(a) shall be payable only according to the rates specified in
Schedule III of the principal Act, as in force on the date of
publication of the said notification, shall, for all purposes be
deemed to be and to have always been validly done or taken
in accordance with law, as if section 4 of this Act had been D
in force at all material times when such acts or proceedings
were done or taken."
As already mentioned the respondent filed Writ Petition No. 1464
of 1974 claiming compensation applying the multiple of 9 times instead E
of2 times and for a direction to the authorised officer to prepare the Draft
Compensation Assessment Roll in respect of the lands which had vested
taking into account the provisions of aforesaid Act 7 of 1974. This stand
was taken on behalf of the respondent because the effect of Act 7 of 1974
was that vesting was to take effect with effect from 1.3.1972 as provided
in Section 3 of Act 7 of 1974. On 1.3.1972, admittedly aforesaid F
Amendment Act 39 of 1972 by which the compensation amount payable
for the surplus lands was red•1ced from 9 times to 2 times of the net annual
income had not come into force, it came into force with effect from
21.12.1972. As such if by virtue of Act 7of1974 ifthe vesting had taken
place with effect from 1.3.1972 the date of the commencement of Act 7 of G
1974, it shall be deemed that vesting had taken place prior to 21-12-1972
when admittedly Schedule III provided for payment by applying the
multiple of 9 times. The High Court by its order dated 8.10.1976 quashed
the Draft Compensation Assessment Roll published, treating the vesting
of the surplus lands with effect from l.3.1972 because of Act 7 of 1974.
Civil Appeal No. 134/80 is directed against aforesaid order of the High H
206
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A Court dated 8.10.1976. The respondent also tiled Writ Petition No. 624
of 1978 for issuance of mandamus to the authorised officer on basis of the
aforesaid judgment and order of the High Court dated 8.10.1976 in Writ
Petition No. 1464/74 to prepare the Draft Assessment Roll as per that
judgment. The High Court by its order dated 3.3.1978 directed the
authorised officer to prepare the Assessment Roll accordingly.
B
The aforesaid Act 25 of 1978 was published in the Tamil Nadu
Government Gazette on 18.5.1978 and took effect on and from 1.3.1972.
It restored parts of sub-section (3) of Section 18 as it stood prior to the
amendment in that sub-section by Act 7 of 1974. It reiterated that the date
of vesting of the surplus lands shall be date of the publication of the
C notification under sub-section (I) of Section 18 of the Act. So far the
respondent is concerned, such notification under sub-section (1) of Section
18 had been published on 4.4.1973, i.e. after 21.12.1972 from which date
because of Amendment Act 39 of 1972 the compensation amount payable
for the surplus lands had been reduced from 9 times to 2 times of the net
D annual income. Section 5 of Act 25 of 1978 also contained non-obstante
clause with a deeming. fiction saying that notwithstanding anything
contained in the Tamil Nadu Land Reforms (Fixation of Ceiling on Land)
Sixth Amendment Act 1972 (Act 7 of 1974) or any judgment, decree or
order of any court, sub-section (2) of Section 3 of the aforesaid 1972 Act
shall be omitted and shall be deemed always to have been omitted. Section
E 6 thereof said that notwithstanding anything contained in any judgment,
decree or order of any court where before the date of the publication of
the said Act in Tamil Nadu Government Gazette a notification under subsection (1) of Section 18 of the Principal Act had been published 'the
surplus lands specified in such notification 'shall be deemed to have vested
in the State Government with effect from the date of such publication
F only .. .' and the provisions of the principal Act as modified by Section 4 of
Act 25 of 1978 shall for all purposes apply and be deemed always to have
applied in respect such surplus lands so vested and compensation in respect
of surplus land shall be paid only according to the rates specified in
Schedule Ill of the principal Act as in force on the date of the publication
G of such notification. In other words, Sections 5 and 6 of Act 25 of 1978
purported to efface and obliterate the amendment which had been introduced
in sub-section (3) of Section 18 by Act 7of1974 and purported to.validate
the notification which had been issued on 4.4.1973 under sub-section (I)
of Section 18 of the principal Act declaring 3414.78 acres of the land
belonging to the respondent as surplus. It need not be pointed out that this
H was done because the multiple of9 times was reduced to 2 times by Act 39
....
-
STATE OF T.N. v. AROORAN SUGARS LTD. [N.P. SINGH, J.]
207
of 1972 with effect from 21-I2-1972. Ifthe vesting had taken place by A
effect of amended sub-section (3) of Section 18 by Act 7 of 1974 with
effect from 1.3 .1972, the date of the commencement of the said Act, then
the respondent was entitled for compensation applying the multiple of 9
times.
Writ Petition Nos. 2341-2343 of 1978 were filed on behalf of the B
respondent questioning the validity of the aforesaid provision of Act 25 of
1978 and for a direction that such provisions which were introduced by
the said Act had no effect on the right of the respondent to receive
compensation applying the minimum multiple of 9 times of the net annual
income. Those Writ Petitions were allowed by a Division Bench of the
High Court on 20.7.1979. Civil Appeal Nos. 352-354/80 have been filed C
against the said judgment.
Mr. Venugopal, the learned counsel appearing for the appellant-State,
took a stand that as Civil Appeal No. 134/80 has been filed on behalf of
the State challenging the validity of the judgment and order of the High
Court dated 8.10.1976 in Writ Petition No. 1464/74 directing payment of D
compensation to the respondent applying the provisions of Act 7 of 1974,
after coming into force of the Act 25 of 1978 it shall be deemed that the
basis of the Judgment in Writ Petition No. 1464/74 has been taken away
as such the respondent cannot claim compensation by applying the multiple
of 9 times. It was also submitted on behalf of the appellant-State that the E
provisions of Act 25 of 1978 being constitutional and valid, High Court
should have dismissed the Writ Petition Nos. 2341-2343 of 1978 filed on
behalf of the respondent questioning the validity of Act 25 of 1978.
It may be mentioned at the outset that none of the two judgments of
the High Court dated 8.10.1976 and 20.7.1979 in Writ Petition No. 1464/ F
74 and Writ Petition Nos. 2341-2343/78 have become final. Civil Appeal
No.134of1980 and Civil Appeal Nos. 352-354of1980 are directed against
the aforesaid judgments dated 8.10. I 976 and 20.7.1979. In this background,
it has to be examined whether Sections 4, 5 and 6 of Act 25 of 1978 with
non-obstinate clause and deeming provisions have taken away the effect G
of the aforesaid judgment of the High Court dated 8.10.1976 directing the
appellant-State to apply 9 times multiple in view of the amendments
introduced by Act 7 of 1974. The other aspect is as to whether in view of
the provisions aforesaid of Act 25 of 1978, this Court while considering
the appeal against aforesaid judgment dated 8.10.1976 in Writ Petition
No.1464/74 has now to proceed as ifthe amendments in the principal Act H
208
SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.
A by Act 7 of 1974 had never been introduced. There is no dispute in respect
of legislative competence of the legislature to enact Act 25 of 1978. The
only dispute is whether provisions of that Act has achieved the desired
result.
Sections 5 and 6 of Act 25 of 1978 contain deeming fiction in its
B different clauses while purporting to omit and remove the amendments
which had been introduced by Act 7 of 1974 in the Principal Act. The role
of a provision in a statute creating legal fiction is by now well settled.
When a statute creates legal fiction saying that something shall be deemed
to have been done which in fact and truth has not been done, the Court has
no examine and ascertain as to for what purpose and between that persons
C such a statutory fiction is to be resorted to. Thereafter courts have to give
full effect to such a statutory fiction and it has to be carried to its logical
conclusion. In the well-known case of East End Dwellings Co. Ltd. v.
Fins/Jury Borough Council, (1952], AC 109 Lord Asquith while dealing
with the provisions of the Town and Country Planning Act, 1947, observed:
D
E
"If you are bidden to treat an imaginary state of affairs as
real, you must surely, unless prohibited from doing so, also
imagine as real the consequences ao1d incidents which, if the
putative, state of affairs had in fact existed, must inevitably
have flowed from or accompanied it... The statute says that
you must imagine a certain state of affairs; it does not say
that having done so, you must cause or permit your
imagination to boggle when it comes to the inevitable
corollaries of that state of affairs."
That statement of law aforesaid in respect of a statutory fiction is
F being consistently followed by this Court. Reforence in this connection
may be made to the cases of State of Bombay v. Pandurang. Vinayak,
(1953] SCR 773; Chief Inspector of Mines v. Karam Chand Thapar, (1962]
1 SCR 9; JK. Cotton Spinning and Weaving Mills Ltd. v. Union of India,
(1988] 1 SCR 700; M Venugopal v. Divisional Manager, Life Insurance
G Corporation of India, (1994] 2 SCC 323 and Barish Tandon v. Additional
District Magistrate, Allahabad, [1995] I SCC 537.
Section 5 of Act 25 of 1978 provides that notwithstanding anything
contained in Act 7 of 1974, or in any judgment, decree or order of any
court, or other authority, sub-section (2) of section 3 of the aforesaid Act
H 'shall be omitted and shall be deemed always to have been omitted and the
-
STATE OF T.N. v. AROORAN SUGARS LTD. [N.P. SINGH,J.]
209
modifications made to section 18 .of the principal Act' by the said sub- A
section (2)-
(a) 'shall be deemed never to have been made and the
provisions of the said section 18 of the principal Act as they
stood prior to the said modifications shall continue in force
and shall be deemed always to have continued in force', and B
(b) 'shall be deemed never to have had the effect of vesting
in the State Government the surplus lands specified in any
notification published under sub-section (I) of the said section
18 of the principal Act on or after the 2nd May 1962 and
before the date of publications of this Act in the Tamil Nadu C
Government Gazette, from a date earlier to the date of the
publication of the notification under the said sub-section (l)
and shall be deemed always to have had the effect of vesting
in the State Government such surplus lands, only with effect
from the date of the publication of such notification.'
The legislature by different deeming clauses and through statutory
fiction requires the Court to treat that amendments so introduced by Act 7
D
of 1974 had never been introduced in the Principal Act. The power of the
legislature to amend, delete or obliterate a statute or to enact a statute
prospectively or retrospectively cannot be questioned and challenged unless E
the court is of the view that such exercise is in violation of Article 14 of
the Constitution. It need not be impressed that whenever any Act or
amendment is brought in force retrospectively or any provision of the Act
is deleted retrospectively, in this process rights of some are bound to be
effected one way or the other. In every case, it cannot be urged that the
exercise by the legislature while introducing a new provision or deleting F
an existing provision with retrospective effect per se shall be violative of
Article 14 of the Constitution. If that stand is accepted, then the necessary
corollary shall be that legislature has no power to legislate retrospectively,
because in that event a vested right in effected; of course, in special situation
this Court has held that such exercise was violative of Article 14 of the G
Constitution. Reference in this connection may be made to the cases of
State of Gujarat and Another v. Raman Lal Keshav Lal Soni and Others,
[1983] 2 SCR 287; T.R Kapur v. State of Haryana, [1986] Supp. SCC
584 and Union of India v. Tushar Ranjan Mohanty, [1994] 5 SCC 450. In
the case of State a/Gujarat v.