Mineral Development Co. Ltd. v. State Of Bihar — 1955 DIGILAW 52 (PAT)

Judgment Das, J. 1. Those three appeals arise out of three orders dated 4-12-1954 by which the learned Subordinate Judge of Hazaribagh rejected the prayer of the plaintiffs, now appellants before us, for the issue of a temporary injunction restraining the State of Bihar and its officers, agents and employees from holding an enquiry under Sec. 4(h), Bihar Land Reforms Act, 1953, and from interfering with or disturbing the possession of the appellants in respect of a large number of houses and a very large area of land. The appeals have been argued together as a common question of law arises therein, and this judgment will govern all the three appeals. 2. In appeal No. 424 the appellant is the Mineral Development Company Ltd., a limited Company incorporated under the Indian Companies Act and having its registered office in Calcutta. In appeal No. 425 the appellant is Messrs. Jharkhand Mines and Industries Ltd., a company incorporated under the Indian Companies Act and having its registered office in Calcutta. The appellant in appeal No. 426 is the Ramgarh Farms and Industries Ltd., having its registered office in Calcutta. The Mineral Development Company Ltd., it is stated holds a mineral lease dated 29-12-1947- for 999 years in respect of 3028 villages appertaining to the estate of the Raja Bahadur of Ramgarh, an estate which is now vested in the State Government of Bihar by virtue of a notification under Sec.3, Bihar Land Reforms Act, 1950. The same company also holds a lease dated 29-12-1947 in respect of a number of houses or buildings, the period of the lease being 101 years, executed by the said Raja Bahadur of Ramgarh. The Jharkhand Mines and Industries Ltd. hold a mining lease for working coal, dated 19-2-1948 for 7500 bighas of land in the estate, of the Raja Bahadur of Ramgarh. They also hold a reversionary lease in respect of 261 villages, dated 20-2-1948; both the leases are for the period of 939 years. This Company also holds a lease for certain buildings lying in the same estate, the leases for the buildings having been executed in 1950. The Ramgarh Farms and Industries Ltd. hold raiyati lease executed by the Raja of Ramgarh on 12-2-1948 by means of which more than 2,56,000 acres of land have been settled with them. This Company also holds a lease for certain buildings lying in the same estate, the leases for the buildings having been executed in 1950. The Ramgarh Farms and Industries Ltd. hold raiyati lease executed by the Raja of Ramgarh on 12-2-1948 by means of which more than 2,56,000 acres of land have been settled with them. The aforesaid three companies have brought three suits against the State of Bihar in which they have asked for certain declarations, one of the declarations being that Sec. 4 (h), Bihar Land Reforms Act, 1950 is unconstitutional and unworkable. They also want a declaration that the buildings leased to the two Companies, namely, the Mineral Development Company Ltd. and the Jharkhand Mines and Industries Ltd. are protected under Sec.11, Bihar Land Reforms Act and the State Government cannot take possession of those buildings and houses. In all the three suits the plaintiff Companies ask for the issue of a permanent injunction restraining the State Government its officers, agents and employees, from taking possession of the aforesaid buildings and houses or of the lands which had been settled with the third Company, namely, the Ramgarh Farms and Industries Ltd. In all these three suits the plaintiff Companies also asked for the issue of a temporary injunction, which prayer the learned Subordinate Judge rejected by his order dated 4-12-19.54. It is against that order that the present appeals have bean filed. I may state here that in all the three suits, the State of Bihar filed a written statement in which it was stated that the relevant provisions of the Bihar Land Reforms Act, 1950, were constitutional and valid; it was also alleged that the leases or transfers which the Raja of Ramgarh had made in favour of the plaintiff Companies were bogus and colourable transfers for the purpose of evading or defeating the provisions of the Bihar Land Reforms Act, 1950 , and that the transfers were without consideration and the transferees were not in possession. It was also alleged that Sec.11, Bihar Land Reforms Act, 1950 , did not protect the houses and buildings of the first two plaintiff Companies. On the same grounds the State of Bihar also resisted the prayer of the plaintiff Companies for the issue of a temporary injunction, 3. It was also alleged that Sec.11, Bihar Land Reforms Act, 1950 , did not protect the houses and buildings of the first two plaintiff Companies. On the same grounds the State of Bihar also resisted the prayer of the plaintiff Companies for the issue of a temporary injunction, 3. The first and foremost question which has been agitated before us on behalf of the appellants is if Sec. 4(h) Bihar Land Reforms Act, 1950 , is prima facie, unconstitutional and invalid. The constitutionality of the Bihar Land Reforms Act, 1950, was considered by the Supreme Court in --State of Bihar V/s. Kameshwar Singh, AIR 1952 SC 252 (A). By a majority decision it was held that the Bihar Land Reforms Act, 1950 was valid except the provisions of Sec. 4(b) and Sec.23(1), these provisions only being held unconstitutional and void. I may state here that Sec. 4(h), Bihar Land Reforms Act, 1950 , was amended by the Bihar Land Reforms (Amendment) Act, 1953. After the amendment, Sec. 4(h) is in these terms : "The Collector shall have power to make inquiries in respect of any transfer including the settlement or lease of any land comprised in such estate or tenure or the transfer of any kind of interest in any building used primarily as office or cutchery for the collection of rent of such estate or tenure or part thereof, made at any time after the first day of January, 1946, and if he is satisfied that such transfer was made with the object of defeating any provisions of this Act or causing loss to the State or obtaining higher compensation thereunder, the Collector may, after giving reasonable notice to the parties concerned to appear and be heard and with the previous sanction of the State Government, annul such transfer, dispossess the person claiming under it and take possession of such property on such terms as may appear to the Collector to be fair and equitable." The constitutionality of this amended section was again considered by a Bench of this Court in --Prem Manjari Devi V/s. State of Bihar, AIR 1954 Pat 550 (B). It was therein held that the provisions of Sec. 4 (h) were constitutionally valid and they were enacted for carrying out more effectively the main provisions of the Act and it was pointed out that the enquiry imposed on the Collector under Sec. 4(h) was meant in the first place to find out what was the quantum of the property vested in the State Government by the notification under Sec.3 of the Act, and, in the second place, they were meant for preventing the evasion of the Act by dishonest zamindars. The object of Sec. 4(h) was to strike down transactions which were not bona fide and which were calculated to defeat the provisions of the Act. 4. The aforesaid decision is a Bench decision and is binding unless learned counsel for the appellants can satisfy us that the decision is wrong or that the decision does not discuss reasons which learned counsel is now giving for his contention that Sec. 4(h) is unconstitutional and unworkable. Learned counsel for the appellants has contended before us that the reasons which he is now giving for his contention that Sec. 4(h) is unconstitutional and unworkable were not considered in any of the earlier decisions, and learned counsel, therefore, asks us to hold on these new reasons that Sec. 4(h) is both unconstitutional and unworkable. In my opinion, the reasons which learned counsel has now given are prima facie not convincing reasons. Lest I be misunderstood, I must make it clear that what I am saying now is not a final determination of the questions, at issue in the three suits; what I am stating has reference only to the question whether prima facie the appellants have been able to make out that Sec. 4 (h), Bihar Land Reforms Act is unconstitutional and unworkable. One reason given by learned counsel for holding that Sec. 4(h) is unconstitutional is that the latter part of the section empowers the Collector to lay down such terms as may appear to the Collector to be fair and equitable before taking possession of the property. It is argued that this part of the section amounts to delegation of legislative function. Prima facie, I am unable to accept this contention. It docs not, in my opinion, amount to delegation of any legislative , function at all. It is argued that this part of the section amounts to delegation of legislative function. Prima facie, I am unable to accept this contention. It docs not, in my opinion, amount to delegation of any legislative , function at all. I do not think I need say anything more on this point at this stage. 5. The second reason in support of the contention that Sec. 4(h), is unconstitutional and unworkable is based on those words of the section which state that the Collector must be satisfied that the transler was made with the object of defeating any provisions of the Act or causing loss to the State or obtaining higher compensation thereunder. It is pointed out that all the leases of the plaintiff Companies relate to a period earlier than the date on which the Bihar Land Reforms Act, 1950 , received the assent of the President, such assent having been received on 11-9-1950. The argument of learned counsel for the appellants is that before September, 1950; it was not possible for anybody to defeat the provisions of the Act etc., because the provisions of the Act were not known in law before that date. This argument, in my opinion, fails to take note of the history which led to the legislation known as the Bihar Land Reforms Act, 1950 . In 1947 the Bihar Abolition of Zamindaris Act was introduced in the Bihar Legislature and was passed in 1949. It was, however, repealed by Act 9 of 1950 on 18-1-1950. Before that date, however, there was one other . Act which was passed, konwn as the State Management of Estates and Tenures Act, which was passed in 1949. That Act also came to nothing for one reason or another. The Bihar Land Reforms Act, 1950, was introduced in the Legislature in 1949 and received the assent of the President on 11-9-1950. The acquisition of zamindari and the manner in which zamindari was to be acquired and compensation paid therefor, were known to everybody from 1946-47. That is why Sec. 4(h) was enacted in order to strike down transactions which were not bona fide. That was the object of Sec. 4(h) as explained in AIR 1954 Pat 550 (B). The acquisition of zamindari and the manner in which zamindari was to be acquired and compensation paid therefor, were known to everybody from 1946-47. That is why Sec. 4(h) was enacted in order to strike down transactions which were not bona fide. That was the object of Sec. 4(h) as explained in AIR 1954 Pat 550 (B). I am, therefore, unable to accept the contention of learned counsel, for the appellants that Sec. 4(h) is unworkable or unconstitutional on the ground that it makes it incumbent on the Collector to be satisfied that the transfer was made with the object of defeating any provisions of the Act or causing loss to the State or obtaining higher compensation thereunder, before he can set aside the transfer. The second reason given by learned counsel in support of his contention does not appear to me to be convincing at this stage. 6. It has then been contended before us that the buildings and houses which the first two plaintiff companies have taken in lease are protected under Section 11, Bihar Land Reforms Act. Sec.11 of the Act states, inter alia", that all buildings not included in the mineral lease but in the use and occupation of the lessee for purposes connected with the working or extraction of the mines and minerals comprised in the lease shall be deemed to have been leased by the State to the lessee with effect from the data of vesting of the estate, subject to the payment of such fair and equitable ground rent as may be agreed upon between, the State and the lessee etc. The argument is that these buildings and houses are used for working the mines and, therefore, all that the State Government are entitled to is to take rent from the lessee. This argument raises a question of fact as to whether the houses and buildings concerned are really in the use and occupation of the lessee for purposes connected with the working or extraction of the mines and minerals comprised in the lease. At this stage there are no materials before us on which this question of fact can be determined. This argument raises a question of fact as to whether the houses and buildings concerned are really in the use and occupation of the lessee for purposes connected with the working or extraction of the mines and minerals comprised in the lease. At this stage there are no materials before us on which this question of fact can be determined. It is worthy of note, however, that under Sec. 4 (h) of the Act the Collector can take action in respect of any transfer of any kind of interest in any building which is used primarily as office or cutchery for the collection of rent of such estate or tenure etc. The Collector has not yet held any enquiry, and the appellants want that the Collet#6r should be prevented from holding any enquiry whatsoever. Unless the Collector holds an enquiry, we do not know to what finding he may come. He am take action only if the conditions of Sec. 4 (h) are fulfilled. It is somewhat premature to say at this stage whether the conditions of Section 4(h) will or will not be fulfilled.. It is not therefore, possible to hold at this stage if the buildings or houses concerned are or are not protected under Sec.11. The Collector cannot be prevented from holding an enquiry under Section 4(h) of the Act, provided there are no prima facie reasons for holding that Sec. 4(h) is unconstitutional or unworkable. 7. Learned counsel for the appellants also contended before us that the rules made under the Act and the form prescribed for action under Sec. 4 (g) and under Sec. 4(h), were ultra vires the Act. This is a point which does not fall for consideration at this stage and I do not wish to say anything about it. 8. Some argument has been advanced before us on the question of the balance of convenience. Unless we are prima facie satisfied on proper materials placed before us that the houses or buildings in question were not used as cutcheries but were used for working the mines, we cannot hold that the balance of convenience lies in favour of the appellants. Prima facie, it seems surprising that such a large number of houses and buildings should be given in lease for working mines or minerals. Prima facie, it seems surprising that such a large number of houses and buildings should be given in lease for working mines or minerals. We nave not seen the leases as they have not been printed in the paper-book; but on the materials placed before us; it is not possible to come to any finding at this stage that the houses or buildings in question were used for working the mines and minerals. Moreover, the relevant question would be for what purpose the houses or buildings were used before the leases were given; if they were used as cutcheries for the collection of rent at that time and the transfers were made for any of the purposes mentioned in Sec. 4(h), then the Collector will have jurisdiction to set aside the transfers. These are, however, matters on which no conclusive opinion can be given at this stage; that is, before the Collector holds an enquiry find arrives at the necessary findings. All that I need say at this stage is that the appellants have failed to make out a case that the balance of convenience is in their favour. 9. I must make it clear that no question of the application of Sec.11, Bihar Land Reforms Act, 1950, arises in connection with the raiyati leases in favour of the Ramgarh Farm and Industries Ltd. With regard to these raiyati leases, learned counsel for the appellants has raised a somewhat curious argument. He has referred us to Sec. 4(a) of the Act which states, inter alia, that subject to the subsequent provisions in the chapter, the interests of the proprietor or tenure-holder vest in the State other than the interests of raiyats or under-raiyats. The argument is that there is an exclusion of the raiyati interest in Section 4(a), and though there is no exclusion of a raiyati settlement from the enquiry under Sec. 4(h), Sec. 4(h) should be read as subject to Sec. 4(a) and an enquiry into raiyati settlements should be excluded from the purview of Section 4(h). In my opinion this argument, though novel, has no merit or substance. Clause (a) of Sec. 4 is itself subject to subsequent provisions of the chapter; therefore, Clause (a) will be subject to Clause (h). In my opinion this argument, though novel, has no merit or substance. Clause (a) of Sec. 4 is itself subject to subsequent provisions of the chapter; therefore, Clause (a) will be subject to Clause (h). There is no conflict between the two clauses; What Clause (a) says is that a real raiyati interest, but not a transfer purporting to he a transfer of a raiyati interest for the purpose of defeating the provisions of the Act etc., does not vest in the State. 10. For the reasons given above, I hold that the appellants have failed to make out any prima facie case for the issue of a temporary injunction. The learned Subordinate Judge rightly rejected the prayers of the appellants for the issue of a temporary injunction. The appeals accordingly fail and are dismissed with costs. Imam, J. 11 I agree.