# VINODCHANDRA SAKARLAL KAPADIA v. STATE OF GUJARAT AND ORS

- **Citation:** [2020] 5 S.C.R. 897
- **Court:** Supreme Court of India
- **Decided:** 2020-06-15
- **Case number:** Civil Appeal No. 2573 of 2020
- **Bench:** Uday Umesh Lalit, Indu Malhotra, A. S. Bopanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vinodchandra-sakarlal-kapadia-v-state-of-gujarat-and-ors-34572
- **Pages:** 104

## Headnote

Bombay Tenancy and Agricultural Lands Act, 1948 - ss.63,
43 & 14, 17, 17B, 27, 29, 32, 32A, 32B, 32F, 32H, 32I, 32O, 32P,
32PP, 32PPP, 32QQ, 32R, 32U, 33(1), 63A, 64, 84C, 88B, 88E -
Agricultural land was in the cultivating possession of a tenant, who
became deemed purchaser under the Act as he was cultivating the
land on tiller's day - Land bequeathed through Will in favour of
appellant - However, it was found that the appellant was not an
agriculturist and the disposal by way of Will in his favour was
contrary to s.63 - Land was declared to be vested in the State -
Division Bench inter alia held that s.63 bars the transfer of
agricultural land to a non-agriculturist for non-agricultural
purpose unless permission is obtained from Collector/authorised
officer - Held: Provisions of the Act intend to confer the advantage
of statutory purchase upon a cultivating tenant, and see that "the
tiller of the land" is conferred ownership w.r.t the lands cultivated
by him as well as the dwelling house occupied by him - In cases
where the tenant is unable to exercise the right of purchase because
his holding would go beyond ceiling limit, the land would not revert
to the landlord, but in terms of s.32P, it must come to the persons or
entities listed in the priority list (includes agricultural labourers,
landless persons) - If a tenant or any other person from the priority
list is conferred ownership in respect of the agricultural land or
when a landlord is allowed to retain the land surrendered by his
tenant, each of them is obliged to cultivate the land personally - In
case any of them is unwilling, the land must be given to those who
principally depend upon agricultural operations for their sustenance
- If a person is a beneficiary of such statutory purchase and wishes
to transfer his holding, the law obliges that he must take prior
sanction from the Collector - A transfer inter vivos would normally
be for consideration where the transferor may get value for the
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land but the legislation requires previous sanction of the concerned
authority so that the transferee can step into the shoes of transferor
and carry out all the obligations - As against this, if a testamentary
disposition which does not have the element of consideration is to
be permitted, and if it is assumed that ss.43 & 63 do not get attracted,
the land can be bequeathed to a total stranger and a nonagriculturist who may not cultivate the land himself leading to
engagement of somebody as a tenant on the land - Legislative intent
to do away with absentee landlordism; to protect the cultivating
tenants and to establish direct relationship between the cultivator
and the land would then be rendered otiose - In the context of the
entire scheme, the term "assignment" used in s.43 must include
testamentary disposition as well - View taken by Division Bench is
correct - In pith and substance, the legislation and the concerned
provisions are completely within the competence of State Legislature
- Interpretation of Statutes - Doctrine of pith and substance - Indian
Succession Act, 1925 - Land Laws and Agricultural Tenancy.
Dismissing the appeals, the Court
HELD: 1.1 A) In terms of Section 32, on the tillers' day
every tenant satisfying the requirements spelt out in Section 32(1),
and upto the ceiling limit as laid down in Section 32A, is deemed
to have purchased from his landlord, free from all encumbrances,
the land held by him as tenant.
B) The purchase price payable by the tenant for such
deemed purchase is to be determined in terms of Section 32H,
according to which, in case of a permanent tenant the purchase
price has to be equal to six times the rent, while in case of other
tenants, the purchase price would not be less than 20 times the
assessment, and not more than 200 times the assessment.
C) In case the proceedings for eviction of the tenant are
pending, the deemed date of purchase will stand postponed in
terms of the

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[2020] 5 S.C.R. 897
897
VINODCHANDRA SAKARLAL KAPADIA
v.
STATE OF GUJARAT AND ORS.
(Civil Appeal No. 2573 of 2020)
JUNE 15, 2020
[UDAY UMESH LALIT, INDU MALHOTRA
AND A. S. BOPANNA, JJ.]
Bombay Tenancy and Agricultural Lands Act, 1948 - ss.63,
43 & 14, 17, 17B, 27, 29, 32, 32A, 32B, 32F, 32H, 32I, 32O, 32P,
32PP, 32PPP, 32QQ, 32R, 32U, 33(1), 63A, 64, 84C, 88B, 88E -
Agricultural land was in the cultivating possession of a tenant, who
became deemed purchaser under the Act as he was cultivating the
land on tiller's day - Land bequeathed through Will in favour of
appellant - However, it was found that the appellant was not an
agriculturist and the disposal by way of Will in his favour was
contrary to s.63 - Land was declared to be vested in the State -
Division Bench inter alia held that s.63 bars the transfer of
agricultural land to a non-agriculturist for non-agricultural
purpose unless permission is obtained from Collector/authorised
officer - Held: Provisions of the Act intend to confer the advantage
of statutory purchase upon a cultivating tenant, and see that "the
tiller of the land" is conferred ownership w.r.t the lands cultivated
by him as well as the dwelling house occupied by him - In cases
where the tenant is unable to exercise the right of purchase because
his holding would go beyond ceiling limit, the land would not revert
to the landlord, but in terms of s.32P, it must come to the persons or
entities listed in the priority list (includes agricultural labourers,
landless persons) - If a tenant or any other person from the priority
list is conferred ownership in respect of the agricultural land or
when a landlord is allowed to retain the land surrendered by his
tenant, each of them is obliged to cultivate the land personally - In
case any of them is unwilling, the land must be given to those who
principally depend upon agricultural operations for their sustenance
- If a person is a beneficiary of such statutory purchase and wishes
to transfer his holding, the law obliges that he must take prior
sanction from the Collector - A transfer inter vivos would normally
be for consideration where the transferor may get value for the
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land but the legislation requires previous sanction of the concerned
authority so that the transferee can step into the shoes of transferor
and carry out all the obligations - As against this, if a testamentary
disposition which does not have the element of consideration is to
be permitted, and if it is assumed that ss.43 & 63 do not get attracted,
the land can be bequeathed to a total stranger and a nonagriculturist who may not cultivate the land himself leading to
engagement of somebody as a tenant on the land - Legislative intent
to do away with absentee landlordism; to protect the cultivating
tenants and to establish direct relationship between the cultivator
and the land would then be rendered otiose - In the context of the
entire scheme, the term "assignment" used in s.43 must include
testamentary disposition as well - View taken by Division Bench is
correct - In pith and substance, the legislation and the concerned
provisions are completely within the competence of State Legislature
- Interpretation of Statutes - Doctrine of pith and substance - Indian
Succession Act, 1925 - Land Laws and Agricultural Tenancy.
Dismissing the appeals, the Court
HELD: 1.1 A) In terms of Section 32, on the tillers' day
every tenant satisfying the requirements spelt out in Section 32(1),
and upto the ceiling limit as laid down in Section 32A, is deemed
to have purchased from his landlord, free from all encumbrances,
the land held by him as tenant.
B) The purchase price payable by the tenant for such
deemed purchase is to be determined in terms of Section 32H,
according to which, in case of a permanent tenant the purchase
price has to be equal to six times the rent, while in case of other
tenants, the purchase price would not be less than 20 times the
assessment, and not more than 200 times the assessment.
C) In case the proceedings for eviction of the tenant are
pending, the deemed date of purchase will stand postponed in
terms of the first proviso to Section 32.
D) Even if the tenant had lost the possession before the
tillers' day, in certain cases the possession can be restored to
him and the benefit of statutory purchase can be enjoyed by him
as stipulated in sub-sections (1A) and (1B) of Section 32. The
benefit of statutory purchase is also made available to tenants in
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areas within the limits of Municipal Boroughs, or within the limits
of Municipal Districts as contemplated by Section 32(4) of the
Act.
E) If the landlord is under a disability, as stated in Section
32F, the right to purchase the land can be exercised after
cessation of disability. In such cases, the period within which the
right to purchase could be exercised was initially a fixed period,
but facility is given in Section 32F(1A) that even if the period had
expired, the tenant is still deemed to have purchased the land.
F) Even a sub-tenant of a permanent tenant is entitled to
the right of deemed purchase in terms of Section 32I and all the
provisions concerning deemed purchase are to apply to such
sub-tenant. The shares of purchase price are then to be allocated
in terms of Section 32I (3).
G) If the tenancy is created after the tillers' day, in terms of
Section 32O, as it stood before its deletion (vide Gujarat Act
No.10 of 2009), a tenant could exercise the right of purchase
within one year from the commencement of his tenancy.
H) If the purchase has become ineffective or there was
failure on the part of the tenant to exercise the right of purchase,
the Collector under Section 32P either suo motu, or on an
application, can pass appropriate directions in terms of Section
32P(2). In such cases, the land is to be disposed of to the persons
in the priority list. At the top of the priority list is the tenant
himself, in case he is willing to accept the offer of sale, followed
by various entities and persons including agricultural labourers,
land-less persons, small holders and persons belonging to
Scheduled Castes and Scheduled Tribes.
I) If none of those persons in the priority list come forward
to purchase the land, the land is to vest in the State Government,
whereupon in terms of Section 32P(4) the purchase price can be
determined, which will then be paid to the owner of the land.
J) Where the purchase in favour of persons from the priority
list in terms of Section 32 is effected, the price will be determined
in terms of Section 32P(5) read with other provisions, to be paid
in annual instalments not exceeding six.
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K) If any land was surrendered to the landlord before the
specified date and the possession of the land was taken by the
landlord, in terms of Section 32P(7), the landlord will be entitled
to the use and occupation of the land so long as he cultivates the
land personally. In such cases, by virtue of Section 32P(8) no
land as described in Section 32P(7) can be transferred by sale,
mortgage, lease or assignment without the previous sanction of
the Collector.
L) Even in cases where the land is at the disposal of the
Collector under Section 32P, by virtue of Sections 32PP, 32PPP
additional opportunities are granted to the tenant to avail of the
benefit of statutory purchase. Even where the tenant had failed
to deposit the purchase price, in cases covered by Section 32QQ
the amount will be deposited on his behalf by the State
Government.
M) Upon payment of the last instalment, a certificate of
purchase is issued to the tenant or sub-tenant or such other
person(s)/entities in the priority list, as the case may be. The
certificate of purchase is conclusive evidence of the ownership
of such purchaser.
N) A right was conferred upon the tenant with respect to a
dwelling house under Section 17 whereunder the tenant was given
the first option of purchasing the site at a value, to be determined
by the tribunal. However, by virtue of the newly incorporated
Section 17B, every tenant is deemed to have purchased from his
landlord the site on which the dwelling house occupied by such
tenant is built and the land immediately appurtenant thereto and
necessary for the enjoyment of dwelling house.
O) If the landlord intends to sell any land, he must apply to
the tribunal in terms of Section 64 which may thereafter determine
the reasonable price, and the offer has to be made in terms of
Section 32P to the concerned persons.
P) Section 88B had granted exemption from the provisions
pertaining to statutory purchase and determination of price in
respect of lands held by a University or a trust for an educational
purpose, a hospital, punjarapol or Gaushala and to lands donated
by any person for the purposes of rendering any services to the
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community. However, in terms of Section 88E, such exemption
ceased to operate from the specified date, and the tenants of
such lands are also deemed to have purchased the land on the
specified date, and all the relevant provisions regarding statutory
purchase would then apply to such land.
Q) Section 32R obliges the purchaser of land to cultivate
the land personally, and in case of failure, the land can be disposed
of in terms of Section 84C of the Act.
The aforesaid provisions deal with matters pertaining to
and arising out of proceedings related to statutory purchase.
Sections 14 and 29 do not belong to that category. In terms of
Section 14, if the land "is assigned" in contravention of Section
27, the tenancy of the tenant is liable to be terminated. Section
27 states in clear terms that "assignment of any interest" in the
land by a tenant shall not be valid. The decision of this Court in
Bhavarlal has stood the test of time which clearly states that a
tenancy governed by a statute which prohibits assignment, cannot
be willed away to a total stranger. The expression "assignment"
in Sections 14 and 27, if understood in light of the decision of this
Court in Bhavarlal which has consistently been followed, must
include testamentary disposition. There is nothing in the
provisions of the Act to suggest that the expression "assignment"
must carry a different meaning in Sections 14 and 27 on the one
hand, and Section 43 on the other. [Paras 20, 21][977-H; 978-AH; 979-A-H; 980-A-E]
Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal
Intawala (1986) 1 SCC 571 : [1986] 1 SCR 1 - affirmed.
1.2 The provisions hereinabove intend to confer the
advantage of statutory purchase upon a cultivating tenant, and
see that "the tiller of the land" is conferred ownership with respect
to the lands cultivated by him as well as the dwelling house
occupied by him. Thus, a cultivating tenant, if his holding is
otherwise not beyond the ceiling limit, would be given the right
to own the land cultivated by him. In cases where no purchase
could be effected either on account of inability of the tenant to
pay the purchase price, or on account of other situations, more
than one attempt and opportunities are afforded to him. The
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statute goes to the extent of obliging the State Government to
deposit the purchase price on his behalf. Even in cases where
the tenant is unable to exercise the right of purchase because
his holding would go beyond ceiling limit, the land would not
revert to the landlord, but in terms of Section 32P, it must come
to the persons or entities listed in the priority list. The priority
list includes persons such as agricultural labourers and landless
persons. The scheme is, therefore, to effectuate distribution of
agricultural lands in such a way that the persons who are
disadvantaged, would be conferred the ownership. After such
purchase, the law obliges the purchaser to cultivate the land
personally and not to transfer it. [Para 22][981-B-E]
1.3 If a tenant or any other person from the priority list is
conferred ownership in respect of the agricultural land or when a
landlord is allowed to retain the land which was surrendered by
his tenant, each one of them is obliged to cultivate the land
personally. In case any of them is unwilling, the land must be
given to those who principally depend upon agricultural operations
for their sustenance. If a person is a beneficiary of such statutory
purchase and wishes to transfer his holding the law obliges that
he must take prior sanction from the Collector. While granting
such sanction, the authorities may essentially check whether the
transferee is an agriculturist or an agricultural labour who
otherwise fulfils the requirements and would carry out the
obligation of cultivating the land personally; and that his holding
would not go beyond the ceiling limit. Since the ownership itself
was conferred as a result of the legislative scheme as discussed
hereinabove, these conditions are inherent in the very conferral
of ownership and, therefore, specifically incorporated in Section
43 with direct reference to the provisions named therein. A
transfer inter vivos would normally be for consideration where
the transferor may get value for the land but the legislation
requires previous sanction of the concerned authority so that
the transferee can step into the shoes of the transferor, and carry
out all the obligations as a part of legislative scheme must be
discharged. Thus, the screening whether a transferee is eligible
or not, can be undertaken even before the actual transfer is
effected. As against this, if a testamentary disposition which does
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not have the element of consideration is to be permitted, and if it
is assumed that Sections 43 and 63 of the Act do not get attracted,
the land can be bequeathed to a total stranger and a
non-agriculturist who may not cultivate the land himself; which
in turn may then lead to engagement of somebody as a tenant on
the land. The legislative intent to do away with absentee
landlordism and to protect the cultivating tenants, and to establish
direct relationship between the cultivator and the land would then
be rendered otiose. The construction put on the expression
"assignment" appearing in Section 43, therefore, has to be
consistent with the legislative scheme. In the context of the entire
scheme, the term "assignment" used in Section 43 of the Act
must include testamentary disposition as well. By adopting such
construction, in keeping with the law laid down by this Court, the
statute would succeed in attaining the object sought to be
achieved. On the other hand, if it is held that the testamentary
disposition would not get covered by the provisions of Section
43, a gullible person can be made to execute a testament in favour
of a person who may not fulfil the requirements and be eligible to
be a transferee in accordance with law. This may not only render
the natural heirs of the tenant without any support or sustenance,
but may also have serious impact on agricultural operations. In
the circumstances the view taken by the Division Bench of the
High Court in the present matter is absolutely correct and does
not call for any interference. The decision is completely consistent
with the law laid down by this Court in Sangappa and Jayamma
and the other cases referred to hereinabove and must be accepted
to be the correct exposition of law. [Paras 23-25][982-D-H;
983-A-E]
Sangappa Kalyanappa Bangi (Dead) through LRs. v.
Land Tribunal, Jamkhandi and Others AIR 1998 SC
3229 : (1998) 7 SCC 294 : [1998] 1 Suppl. SCR 600;
Jayamma v. Maria Bai (Dead) by proposed LRs and
Another AIR 2004 SCW 4412 : (2004) 7 SCC 459 :
[2004] 3 Suppl. SCR 175 - affirmed.
1.4 If the provisions referred to in Section 43 of the Act
and allied provisions are considered in light of the settled
principles extracted earlier, it emerges that the primary concern
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
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of those provisions is to see that the legislative scheme of granting
protection to persons from disadvantaged categories and
conferring the right of purchase upon them, and thereby ensure
direct relationship of a tiller with the land. The provisions, though
lay down a norm which may not be fully consistent with the
principles of Indian Succession Act, are principally designed to
attain and sub-serve the purpose of protecting the holdings in
the hands of disadvantaged categories. The prohibition against
transfers of holding without the previous sanction of the
concerned authorities, is to be seen in that light as furthering the
cause of legislation. Even if by the process of construction, the
expression "assignment" is construed to include testamentary
disposition, in keeping with the settled principles, the incidental
encroachment cannot render the said provisions invalid. In pith
and substance, the legislation and the concerned provisions are
completely within the competence of the State Legislature and
by placing the construction upon the expression "assignment"
to include testamentary disposition, no transgression will ensue.
The construction put by the Division Bench on the provisions
that fell for consideration is accepted. The challenge to the view
taken by the Division Bench must therefore be rejected. The
decision of this Court in Mahadeo which had failed to notice the
earlier decisions in Sangappa and Jayamma and which is
inconsistent with the decisions referred to hereinabove and what
the Court has concluded, must be held to be incorrectly decided.
[Paras 31, 33][999-E-G; 1000-A-B]
Mahadeo (Dead through legal representatives) v.
Shakuntalabai (2017) 13 SCC 756 - held incorrect
law.
Girnar Traders (3) v. State of Maharashtra and Others
(2011) 3 SCC 1 : [2011] 3 SCR 1 - followed.
Manchegowda v. State of Karnataka (1984) 3 SCC
301 : [1984] 3 SCR 502; Lingappa Pochanna Appelwar
v. State of Maharashtra and another (1985) 1 SCC 479
: [1985] 2 SCR 224; Pandey Oraon v. Ram Chander
Sahu and Others (1992) 2 Suppl. SCC 77; Amrendra
Pratap Singh v. Tej Bahadur Prajapati and Others
(2004) 10 SCC 65 : [2003] 6 Suppl. SCR 42; State of
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Rajasthan and Others v. Aanjaney Organic Herbal
Private Limited (2012) 10 SCC 283 : [2012] 7 SCR
1148; Rajasthan Housing Board v. New Pink City
Nirman Sahkari Samiti Limited and Another (2015) 7
SCC 601 : [2015] 5 SCR 365; Samatha v. State of A.P.
and Others (1997) 8 SCC 191 : [1997] 2 Suppl. SCR
305; Welfare Association, A.R.P., Maharashtra and
Another v. Ranjit P. Gohil and Others (2003) 9 SCC
358 : [2003] 2 SCR 139; State of Maharashtra v. Bharat
Shanti Lal Shah and Others (2008) 13 SCC 5 : [2008]
12 SCR 1083 - relied on.
State of Punjab (now Haryana) and Others v. Amar Singh
and Another (1974) 2 SCC 70 : AIR 1974 SC 994 :
[1974] 3 SCR 152; Dayandeo Ganpat Jadhav v.
Madhav Vithal Bhaskar and Others (2005) 8 SCC
340 : [2005] 4 Suppl. SCR 439; Timmakka Kom
Venkanna Naik v. Land Tribunal (1987) 2 Kant LJ 337;
State of W.B. v. Kailash Chandra Kapur (1997) 2 SCC
387 : [1996] 9 Suppl. SCR 398; S. Rathinam alias
Kappamuthu and Others v. L.S. Mariappan and Others
(2007) 6 SCC 724 : [2007] 7 SCR 568; Jaspal Singh
v. Additional District Judge, Bulandshahr & Ors. (1984)
4 SCC 434 : [1985] 1 SCR 889; Dr. Anant Trimbak
Sabnis v. Vasant Pratap Pandi AIR 1980 Bombay 69;
Lincai Gamango and Others v. Dayanidhi Jena and
Others (2004) 7 SCC 437 : [2004] 2 Suppl. SCR 825;
Shamjibhai Keshavjibhai Kansagra (Patel) & Ors. v.
Principal Secretary, Revenue Dept. (Appeals) & Ors.
AIR 2011 Gujarat 55 - referred to.
Case Law Reference
[1998] 1 Suppl. SCR 600
affirmed
Para 6 (e)
[2004] 3 Suppl. SCR 175
affirmed
Para 6 (e)
[1974] 3 SCR 152
referred to
Para 8.3
[2005] 4 Suppl. SCR 439
referred to
Para 8.3
(2017) 13 SCC 756
held incorrect law
Para 10
[1996] 9 Suppl. SCR 398
referred to
Para 12(D)
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
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[2007] 7 SCR 568
referred to
Para 12(D)
[1985] 1 SCR 889
referred to
Para 12(D)
[1986] 1 SCR 1
affirmed
Para 12(E)
[1984] 3 SCR 502
relied on
Para 15 (A)
[1985] 2 SCR 224
relied on
Para 15 (B)
(1992) 2 Suppl. SCC 77
relied on
Para 1
[2003] 6 Suppl. SCR 42
relied on
Para 17
[2004] 2 Suppl. SCR 825
referred to
Para 17
[2012] 7 SCR 1148
relied on
Para 1
[2015] 5 SCR 365
relied on
Para 18 (b)
[1997] 2 Suppl. SCR 305
relied on
Para 22
[2003] 2 SCR 139
relied on
Para 28
[2008] 12 SCR 1083
relied on
Para 29
[2011] 3 SCR 1
followed
Para 30
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2573
of 2020.
From the Judgment and Order dated 17.03.2009 of the High Court
of Gujarat at Ahmedabad in Special Civil Application No. 25058 of 2006.
With
Civil Appeal Nos. 2574, 2575, 2576, 2577, 2578, 2579, 2581, 2583,
2584 of 2020.
 Sanjay Parikh, Sr. Adv., Ms. K. V. Bharathi Upadhyaya,
Raghavendra S. Srivatsa, Pai Amit, Rahat Bansal, Aniruddha P. Mayee,
A. Rajarajan, Purvish Jitendra Malkan, Ms. Dharita Purvish Malkan,
Alok Kumar, Ms. Bhavna Sarkar, Ms. Deepa Gorasia, Neerav Thakkar,
Ms. Bina Madhavan, Katubadi Ismail, M/s. Lawyer S Knit & Co, P. S.
Sudheer, Rishi Maheshwari, Ms. Mayuri Nayyar Chawla, Ms. Anne
Mathew, Bharat Sood, Ms. Shruti Jose, Divyesh Sejpal, S. Hariharan,
Ms. Jaikriti S. Jadeja, Vikash Singh, Somesh Chandra Jha, Anand
Darshan, Rahul Narang, Mahesh Agarwal, Abhinav Agrawal, Nishant
Roa, E. C. Agrawala, Rajiv Kumar, Krishna M. Singh, Sanjeev Gupta,
Sandeep Kumar, Rameshwar Prasad Goyal, Nikhil Goel, Dushyant Sarna
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(for A. Venayagam Balan), Ms. Hemantika Wahi, Rahul Gupta, Advs.
for the appearing parties.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J.
1. Leave granted.
2. These Appeals arise out of the common judgment and order
dated 17.03.2009 passed by the Division Bench of the High Court of
Gujarat at Ahmedabad in Special Civil Application No.25058 of 2006
and all other connected matters while answering the questions referred
to it by a Single Judge of the High Court. The questions that arose for
consideration and the circumstances in which the matters were referred
to it were set out by the Division Bench as under:-.
"We are called upon to decide as to whether Section 63 of the
Bombay Tenancy and Agricultural Lands, Act, 1948 (for short
'the Bombay Tenancy Act') debars an agriculturist from parting
with his agricultural land to a non-agriculturist through a "Will" so
also, whether Section 43(1) of the Tenancy Act restricts transfer
of any land or interest purchased by the tenant under Sections
17B, 32, 32F. 321. 320, 32U, 33(1) or 88E or sold to any person
under Section 32P or 64 of the Tenancy Act through the execution
of a Will by way of testamentary disposition.
Learned Single Judges of this Court have taken a consistent
view that such transfer of property through testamentary disposition
would not violate Section 43 or 63 of the Tenancy Act, Justice
J.B. Mehta in the case of Manharlal Ratanlal @ Radmansinh
Chausinh v. Taiyabali Jaji Mohamed & others (1967-68 (Vol.5)
GLT 199) while interpreting Section 43(1) of the Tenancy Act
took the view that the expression 'transfer' which is used in Section
43(1) of the Tenancy Act must be interpreted in light of the Transfer
of Property Act viz. the transfer by way of act of parties. Learned
Judge took the view that, if the Legislature wanted to include a
transfer by operation of law as to include succession, insolvency,
inheritance, etc. or sales by public auction, specific provision would
have been made to that effect. Learned Judge held all the specific
categories which are mentioned are all of transfers by act of parties,
bequest by Will cannot be included in the scope of the term 'gift'
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
GUJARAT AND ORS.
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or 'assignment'. Justice Rajesh Balia in Ghanshyambhai
Nabheram v. State of Gujarat and others (1999 (2) GLR 1061)
while interpreting Section 63 of the Tenancy Act took a view that
just like, a non-agriculturist be not deprived of his inheritance, a
legatee under a Will, can also be a non-agriculturist, hence, there
is no bar in succeeding the property through testamentary
disposition. Learned Judge held that Revenue Laws dealing with
agricultural lands have not made the land uninheritable and they
also do not disqualify a non-agriculturist from inheritance nor a
number of persons are disentitled from succeeding to estate of an
agriculturist as body of successors, which may result in well
defined share of the estate of deceased vesting in them individually.
Justice Rajesh Balia again in Pravinbhai Bhailalbhai Gor v.
Rajkumar Gupta, collector, Vadodara (1999(1) GLR 440) while
interpreting Section 43 and 63 of the Tenancy Act took the view
that both provisions clearly go to show that they refer only to
transaction or transfer or agreement to transfer of land or any
interest therein which are inter vivos and not to vesting of such
rights in anyone as a result of transmission or as a result of
succession on death of holder and the provisions do not affect the
operation of law of inheritance. Appeal filed against the above
judgment was, however, dismissed in State of Gujarat v. P.B.
Gor (2000 (3) GLR 2168). Justice K.A. Puj also took identical
view in Gasfulbhai Mohmadbhai Bilakhia v. State of Gujarat
(2005 (1) GLR 575) and Gopiraj Dedraj Agrawal (Gopiram
tudraj Agrawal) v. State of Gujarat (2004 (1) GLR 237). Learned
Judge also made reference to the Circular dated 13.02.1989 issued
by the State Government and took a view that that Section 43 as
well as Section 63 of the Tenancy Act would not debar transfer
of property by testamentary disposition. Justice R.K. Abichandani
also took the same view in Babubhai Mervanbhai Patel v. State
of Gujarat 2005 (1) GLH (UJ) 3. Learned Single Judge Justice
Jayant Patel expressed some doubts about the views expressed
in the above-referred judgments and felt that the matter requires
re-consideration in light of the decisions rendered by the Apex
Court in Sangappa Kalyanappa Bangi (dead) through LR (AIR
1998 SC 3229 = (1998) 7 SCC 294 Rajendra Babu J. and
Jayamma v. Maria Bai and another (2004) 7 SCC 459 Sinha,
J.) and hence these matters have been placed before us."
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3. Sections 43 and Section 63 of the Act1 are quoted here for
ready reference:-
"43. Restriction on transfers of land purchased or sold under
this Act:
(1) No land or any interest therein purchased by a tenant under
section 17B, 32, 32F, 32I, 32O2, 32U, 43-1D or 88E or sold to any
person under Section 32P or 64 shall be transferred or shall be
agreed by an instrument in writing to be transferred, by sale, gift,
exchange, mortgage, lease or assignment, without the previous
sanction of the Collector and except in consideration of payment
of such amount as the State Government may by general or special
order determine; and no such land or any interest, therein shall be
partitioned without the previous sanction of the Collector.
Provided that no previous sanction of the Collector shall be
required, if the partition of the land is among the members of the
family who have direct blood relation or among the legal heirs of
the tenant:
Provided further that the partition of the land as aforesaid
shall not be valid if it is made in contravention of the provisions of
any other law for the time being in force:
Provided also that such members of the family or
the legal heirs shall hold the land, after the partition, on the
same terms, conditions and restrictions as were applicable to
such land or interest therein purchased by the tenant or the
person.
(1A) The sanction under sub-section (1) shall be given by the
Collector in such circumstances and subject to such conditions,
as may be prescribed by the State Government.
(1AA) Notwithstanding anything contained in sub-section (1), it
shall be lawful for such tenant or a person to mortgage or create
a charge on his interests in the land in favour of the State
Government in consideration of a loan advanced to him by the
State Government under the Land Improvement Loans Act, 1983,
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
GUJARAT AND ORS. [UDAY UMESH LALIT, J.]
1 The Bombay Tenancy and Agricultural Lands Act, 1948 as applicable to State of
Gujarat.
2 The words '32O' were deleted by Guj. Act No.10 of 2009
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the Agriculturists' Loans Act, 1984, or the Bombay
Non-agriculturists' Loans Act, 1928, as in force in the State of
Gujarat, or in favour of a bank or co-operative society, and without
prejudice to any other remedy open to the State Government,
bank or co-operative society, as the case may be, in the event of
his making default in payment of such loan in accordance with
the terms on which such loan was granted, it shall be lawful for
the State Government, bank or co-operative society, as the case
may be, to cause his interest in the land to be attached and sold
and the proceeds to be applied in payment of such loan.
Explanation. - For the purposes of this sub-section, "bank"
means -
(a) the State Bank of India constituted under the State
Bank of India Act,1955;
(b) any subsidiary bank as defined in clause (k) of Section
2 of the State Bank of India (Subsidiary Banks) Act,
1959;
(c) any correspondent new bank as defined in clause (d)
of Section 2 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970;
(d) the Agricultural Refinance and Development
corporation, established under the Agricultural
Refinance and Development Corporation Act, 1963.
(1B) Nothing in sub-section (1) or (1AA) shall apply to land
purchased under Section 32, 32F, or 64 by a permanent tenant
thereof, if prior to the purchase, the permanent tenant, by usage,
custom, agreement or decree or order of a court, held a
transferable right in the tenancy of the land.
(1C) The land to which sub-section (1) applies and for which no
permission is required under sub-section (1) of section 65B of the
Bombay Land Revenue Code, 1879 for use of such land for a
bonafide industrial purpose may, notwithstanding anything
contained in sub-section (1) of this section, be sold without the
previous sanction of the Collector under sub-section (1) but subject
to payment of such amount as may be determined by the State
Government under sub-section (1).
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(2) Any transfer or partition, or any agreement of transfer, or any
land or any interest therein in contravention of sub-section (1)
shall be invalid.
63. Transfers to non-agriculturists barred.
(1) Save as provided in this Act:-
(a) no sale (including sales in execution of a decree of a Civil
Court or for recovery of arrears of land revenue or for
sums recoverable as arrears of land revenue), gift,
exchange or lease of any land or interest therein, or
(b) no mortgage of any land or interest therein, in which the
possession of the mortgaged property is delivered to the
mortgage, or
(c) no agreement made by an instrument in writing for the
sale, gift, exchange, lese or mortgage of any land or interest
therein,
shall be valid in favour of a person who is not an agriculturist or
who being an agriculturist cultivates personally land not less than
the ceiling area whether as an owner or tenant or partly as owner
and partly as tenant or who is not an agricultural labourer:
Provided that the Collector or an officer authorised by the State
government in this behalf may grant permission for such sale, gift,
exchange, lease or mortgage, or for such agreement on such
conditions as may be prescribed.
Provided further that no such permission shall be granted, where
land is being sold to a person who is not an agriculturist for
agricultural purpose, if the annual income of such person from
other sources exceeds five thousand rupees.
(1A) The State Government may, by notification in the Official
Gazette, exempt from the provisions of sub-section (1), for the
transfer of any agricultural land to any public trust established for
the charitable purpose and which is non-profitable in nature, for
the use of such land in the field of health and education, subject to
such conditions as may be specified therein.
(2) Nothing in this section shall be deemed to prohibit the sale,
gift, exchange or lease, or the agreement for the sale, gift,
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
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exchange or lease, of a dwelling house or the site thereof or any
land appurtenant to it in favour of an agricultural labourer or an
artisan or a person carrying on any allied pursuit.
(3) Nothing in this section shall apply or be deemed to have applied
to a mortgage of any land or interest therein effected in favour of
a co-operative society as security for the loan advanced by such
society or any transfer declared to be a mortgage by a court under
section 24 of the Bombay Agricultural Debtors' Relief Act, 1947.
(4) Nothing in Section 63A shall apply to any sale made under
sub-section (1)."
4. The Sections of the Act which are referred to in said Section
43 and in the light of which the reference was answered by the Division
Bench as well as some other Sections having bearing on the matters in
issue, are extracted hereunder:
"17. Tenant to be given first option of purchasing site on
which he has built dwelling house.-
(1) If a landlord to whom the site referred to in section 16 belongs,
intends to sell such site, the tenant at the expense of whom or
whose predecessor-in-title, a dwelling house is built thereon shall
be given in the manner provided in sub-section (2) of the first
option of purchasing the site at a value determined by the Tribunal.
(2) The landlord intending to sell such site shall give notice in
writing to the tenant requiring him to state within three months
from the date of service of such notice whether he is willing to
purchase the site.
(3) If within the period of three months so specified the tenant
intimates in writing to the landlord that he is willing to purchase
the site, the landlord shall make an application to the Tribunal for
the determination of the value of the site. On receipt of such
application the Tribunal after giving notice to the tenant and after
holding an inquiry shall determine the value of the site [which
shall not exceed 20 times the annual rent thereof]. The Tribunal
may, by an order in writing require the tenant to deposit the amount
of value of such site [within one year] from the date of such
order. On the deposit of such amount the site shall be deemed to
have been transferred to the tenant and the amount deposited
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shall be paid to the landlord. The Tribunal shall on payment of the
prescribed fees grant a certificate in the prescribed form to such
tenant specifying therein the site so transferred and the name of
such tenant.
(4) If the tenant fails to intimate his willingness to purchase the
site within the time specified in sub-section (2) or fails to deposit
the amount of the value within the time specified in sub-section
(3) the tenant shall be deemed to have relinquished his right of
first option to purchase the site and the landlord shall then be
entitled to evict the tenant either on payment of such compensation
for the value of the structure of such dwelling house as may be
determined by the Tribunal or allow the tenant at his option to
remove the materials of the structure.
(5) Any sale of a site held in contravention of this section shall be
null and void.
17B. Tenant to be deemed to have purchased sites referred
to in section 16 from specified date.
(1) On and with effect from such date as the State Government
may, by notification in the Official Gazette, specify, every tenant
referred to in section 16 shall be deemed to have purchased from
his landlord the site on which the dwelling house occupied by
such tenant, was built, and the land immediately appurtenant thereto
and necessary for enjoyment of the dwelling house free from all
encumbrances at the price to the fixed by the Tribunal, being a
price not exceeding twenty times the annual rent for the site.
(2) [Deleted by Guj. Act No.5 of 1973]
(3) As soon as may be thereafter, the Tribunal shall publish or
cause to be published a notice in such village within its jurisdiction
in which all such sites are situate and shall, as far as practicable,
issue notice to each such landlord and tenant and to any other
person interested in such site to appear before it on the date
specified in the notice. The notice published in a village shall be
affixed in the Chavdi or at such public place as the Tribunal may
direct.
(4) The Tribunal shall, after giving an opportunity to such landlord,
tenant and other person interested to be heard and after holding
an inquiry determine the price of the site.
VINODCHANDRA SAKARLAL KAPADIA v. STATE OF
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(5) On the determination of the price of the site under sub-section
(4), the tenant shall deposit the amount of such price with Tribunal-
(a) either in lump sum within one year from such date, or
(b) in such instalments not exceeding three with simple interest
at the rate of 41⁄2 per cent per annum, and at such intervals
during the period not exceeding three years and on or
before such dates.
as may be fixed by the Tribunal and the Tribunal shall direct that
the amount deposited in lump sum or the amount of the instalments
deposited at each interval shall be paid in accordance with the
provisions of section 32Q so far as they are applicable.
(6) On the deposit the amount of the price in lump sum or of the
last instalment of such price, the Tribunal shall, on payment of a
prescribed fee, grant a certificate in the prescribed form to the
tenant declaring him to be the purchaser to the site. Such certificate
shall be conclusive evidence of the sale.
(7) If the tenant fails to pay any instalment on or before the date
fixed by the Tribunal under sub-section (5), the amount of such
instalment and the interest thereon shall be recovered as an arrear
of land revenue.
(8) If after holding an inquiry under sub-section (4), the Tribunal
is satisfied that the tenant is not willing to purchase the site, the
Tribunal shall issue a certificate to the landlord to that effect. On
the issue of such certificate the landlord shall be entitled to evict
the tenant and dispose of the site in such manner as he may think
fit either on payment of such compensation for the value of the
structure of such dwelling house as may be determined by the
Tribunal, or after allowing the tenant, at his option, to remove the
materials of the structure;
Provided that the landlord shall not dispose of the site in
any manner except by first giving option of purchasing the same
for the price determined by the Tribunal, to an agricultural labourer,
landless person, small holder or a village artisan, who owns no
house site, in the said order of priority and where any site is disposed
of without giving such option such disposal shall be void:
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Provided further that the provisions of section 63 shall apply
to the disposal of the site in any manner in a case where the
option of purchase is not exercised by any of the persons mentioned
in the first proviso.
32.