State Of Madras v. V. Srinivasa Ayyangar — 1955 DIGILAW 86 (SC)

Judgement VENKATARAMA AYYAR, J. : This appeal raises a question of considerable importance as to the rights of holders of darmila or post-settlement inams of portions of a village under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Madras Act 26 of 1948), hereinafter referred to as the Act. The subject matter of this appeal is an one-sixteenth share in the village of Karuppur situated within the ambit of the Zamindari of Ramanathapuram. The holders of this anicent Zamindari were, during the 18th Century, the vitual rulers of that part of South India, and were known as Sethupathis or the Lords of Rameswaram and the adjacent isles and seas. In 1757 Muthu Vijaya Raghunatha, the then Rajah of Ramanathapuram, made a grant of the whole of the village of Karuppur to a number of persons for various charitable purposes. In 1802, the estate was permanently settled, and an istimrari sanand was issued in favour of the Rajah. Before that date, the donees under the grant of 175 representing an one-sixteenth share had abandoned the village, and in consequence, the inam had eo extanti been resumed. At the permanent settlement, this one-sixteenth part was included in the assets of the Zamindari, and taken into account in fixing the peishkush thereon. Subsequent to the permanent settlement, on some date which does not appear on the record, Rani Mangaleswari, the then holder of the Zamindari made a fresh grant of the one-sixteenth part which had been resumed, to the inamdars who held the remaining 15/16th portion of the village under the grant of 1757. On 31-12-1863 the Inam Commissioner confirmed the grant of 1757,and issued an inam certificate in respect of the 15/16th portion of the village. The position, therefore, when the Act was passed was that while a 15/16th portion was held by the inamdars under a pre-settlement grant confirmed by the British Government, the remaining one-sixteenth portion was held under post-settlement grant made by the proprietor of the estate. 2. The Act came into force on 19-4-1949. Under S. 1(4) of the Act, certain sections thereof were to come into force at once and the other sections on such date as the Government might by notification appoint in respect of any zamindari, under-tenure, or inam estate. 2. The Act came into force on 19-4-1949. Under S. 1(4) of the Act, certain sections thereof were to come into force at once and the other sections on such date as the Government might by notification appoint in respect of any zamindari, under-tenure, or inam estate. In exercise of the powers conferred by this section, the appellant issued a notification on 22-8-1949 bringing the Act into force as regards the Ramanathapuram estate from 7-9-1949. Among the village mentioned as comprised in the Zamindari was "Karuppur (part)" described as an under-tenure. It is common ground that the part referred to in this notification is the one-sixteenth part, which forms the subject-matter of this appeal. 3. The respondent who represents the holders of this inam filed the application out of which the present appeal arises under Art. 226 of the Constitution for a writ of centiorari quashing the notification dated 22-8-1949 as ultra vires . The ground of attack was that under S.1(3) of the Act, the State had power to notify only what would be estates as defined in S. 3(2) of the Madras Estates Land Act, 1908 (Madras Act 1 of 1908), and that the part of village of Karuppur included in the notification was not an estate as defined in that section. Section 3(2) of Act 1 of 1908, so far as is material, is as follows : "Estate" means - (a) any permanently settled estate or temporarily settled zamindari; (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that subsequent to the grant, the village has, been partitioned among the grantees or the successors in title of the grantee or grantees. 96 (e) any portion consisting of one or more villages of any of the estate specified above in cls. (a), (b) and (c) which is held on a permanent under-tenure." 4. The contention of the respondent was that as the grant in question related only to a fraction of a village, it could not be notified as an under-tenure, as under S. 3(2)(e) an under-tenure, would be an estate only if it related to a whole village or villages. (a), (b) and (c) which is held on a permanent under-tenure." 4. The contention of the respondent was that as the grant in question related only to a fraction of a village, it could not be notified as an under-tenure, as under S. 3(2)(e) an under-tenure, would be an estate only if it related to a whole village or villages. The appellant conceded that the inam in question was not an under-tenure as defined in S. 3(2)(e), as it comprised only part of a village, but contended that even though it was not in itself an estate, it was, nevertheless, part of the Zamindari of Ramanathapuram, being a post-settlement grant of portion of a village comprised therein, and that when that estate was notified, the entirety of it including the inam in question must vest in the Government under S. 3(b) of the Act. The respondent demurred to this contention. In addition, he raised the further contention that even if post-settlement minor inams were within the operation of the Act, they would be protected by S. 20 of the Act which runs as follows : "20(1) In cases not governed by Ss. 18 and 19, where, before the notified date, a landholder has created any right in any land (whether by way of lease or otherwise) including rights in any forests, mines or minerals quarries, fisheries or ferries, the transaction shall be deemed to be valid; and all rights and obligations arising there-under, on or after the notified date, shall be enforceable by or against the Government. Provided that the transaction was not void or illegal under any law in force at the time : Provided further that any such right created on or after 1-7-1945 shall not be enforceable against the Government, unless it was created for a period not exceeding one year : Provided also that where such right was created for a period exceeding one year, unless it relates to the private land of the landholder within the meaning of S. 3, cl. (10), Estates Land Act, the Government may if; in their opinion, it is in the public interest to do so, by notice given to the person concerned, terminate the right with effect from such date as may be specified in the notice, not being earlier than three months from the date thereof". (10), Estates Land Act, the Government may if; in their opinion, it is in the public interest to do so, by notice given to the person concerned, terminate the right with effect from such date as may be specified in the notice, not being earlier than three months from the date thereof". The argument of the respondent was that a post-settlement minor inam would be a right in land created by a land-holder failing within S. 20 that the notification of the estate under S. 1(3) would not ipso factor divest the inamdar of his title to the lands, and that he would be entitled to hold them subject to any action that might properly be taken by the State under S. 20. 5. The learned Judges of the Madras High Court agreed with the appellant that post-settlement minor inams fell within the operation of the Act; but they accepted the contention of the respondent that they were governed by S. 20 of the Act. As it was common ground that the State had not proceeded under that section, they held that the notification was ultra vires , and accordingly quashed the same in so far as it related to the inam forming part of Karuppur village. The appellant applied to the High Court for leave to appeal to this Court against this decision, and though the value of the subject matter was far below the appealable limit, the learned Judges granted a certificate under Art. 133(1)(c) on the ground that the question involved was one of great public importance. That is how the appeal comes before us. 6. Two questions arises for decision in this appeal : (1) Are post-settlement minor inams within the operation of Madras Act 26 of 1948? (2) If they are, are they governed by S. 20 of the Act? 7. On the first question, the appellant does not contend that the inam in question is in itself an estate as defined in S. 3(2), Madras Estates Land Act and liable as such to be notified under the Act. His contention is that when the Zamindari of Ramanathapuram was notified - and there is no dispute that it was validly notified, as it was a permanently settled estate falling within S. 3(2)(a). His contention is that when the Zamindari of Ramanathapuram was notified - and there is no dispute that it was validly notified, as it was a permanently settled estate falling within S. 3(2)(a). Madras Estates Land Act - minor post-settlement inams of land within the Zamindari would vest in the State as part of Zamindari under S. 3(b) of the Act. Section 3(b) is, omitting what is not material, as follows : "With effect on and from the notified date and save as otherwise expressly provide in this Act ........... the entire estate ................... shall stand transferred to the Government and vest in them, free of all encumbrances". The point for decision is whether post-settlement minor inams are parts of the estate out of which they were granted. If they are, then they will vest in the Government under S. 3(b). If they are not, they will remain unaffected by the notification of the parent estate. 8. The status of holders of these inams had been the subject of considerable divergence of judicial opinion in the Madras High Court. 97 To appreciate this, reference must be made to the following definition of landholder in S. 3(5), Madras Estates Land Act : Landholder" means a person owning an estate or part thereof and includes every person entitled to collect the rents of the whole or any portion of the estate by virtue of any transfer from the owner or his predecessor-in-title or of any order of a competent Court of any provision of law." Leaving out the inclusive portion of the definition as not relevant to the present question it will be seen that owners of parts of an estate would also be landholders. The question then arose for decision whether darmila minor inamdars were landholders as defined in S. 3(5), Estates Land Act. If they were the tenants would acquire occupancy rights under S. 6, and proceeding against them could be taken only in the revenue Courts and not in the Civil Courts, as in general, the rights and obligations of the inamdars and the tenants would be governed by the provisions of the Madras Estates Land Act. One view was that as the inamdars had to pay quit rent or jodi to the grantors, their status could not be that of owners and, therefore, they could not be said to own parts of an estate. One view was that as the inamdars had to pay quit rent or jodi to the grantors, their status could not be that of owners and, therefore, they could not be said to own parts of an estate. The contrary view that the inamdars were in substance owners of the land granted to them, and that the liability to make a fixed annual payment did not detract from their character as owners and they would be landholders owning parts of an estate. In view of this conflict of opinion, the question was referred to the decision of a Full Bench in - Brahmayya v. Achiraju , AIR 1922 Mad 373 (FB) (A), which held by a majority that minor darmila inamdars were landholders as defined in S. 3(5), Estates Land Act. This decision was based both on the ground that the inamdars were in the position of owners of parts of an estate and that they were also persons entitled to collect rent, within the inclusive question of the definition. 9. In - Narayanaraju v. Suryanarayudu AIR 1939 PC 244 (B), the question whether the grantee of a portion of a village subsequent to the settlement was a landholders as defined in S. 3(5) came up for decision before the Privy Council. After reviewing the authorities and the conflicting views expressed therein, the Board, agreed with the opinion expressed by the majority of the learned Judges in AIR 1922 Mad 373 (FB) (A), and held that the grantee of postsettlement minor inam would be a landholder on both the grounds mentioned in their Judgements. They discarded "the doctrine that so long as the Zamindar reserves any interest, however insignificant, the permanent grantee from him cannot be the owner", and observed that the words "part of the estate" occurring in the definition must be given their prima facie meaning. The Board felt greater difficulty in accepting the view that the inamdar was a landholders entitled to collect rent within the inclusive portion of the definition. But they expressed themselves satisfied on either ground that "the Full Bench decision of 1922 represents careful and reasonable solution or a stubborn ambiguity in the Act and that it ought not now to be overruled having regard to the time which has elapsed and to the character of the interests affected thereby". But they expressed themselves satisfied on either ground that "the Full Bench decision of 1922 represents careful and reasonable solution or a stubborn ambiguity in the Act and that it ought not now to be overruled having regard to the time which has elapsed and to the character of the interests affected thereby". Thus it was settled law in Madras at the time when Act 26 of 1948 was passed that minor darmila inamdars were owners of parts of an estate. Construing S. 3(b) in the light of the law as then accepted, when a notified estate vests in its entirety in the State under, that provision, a minor darmila inam which forms part of it must also vest in it. 10. Sri R. Kesaya Iyengar, learned counsel for the respondent argued that decisions on S. 3(5), Madras Estates Land Act on the meaning of the word landholder as defined therein, could not be usefully referred for construing the true scope of 3(b) of Act 26 of 1948, as the definition in the Madras Estates Land Act was only for purposes of settling the rights of landlords & tenants, & would be irrelevant for determining the rights of the inamdars as against the State. But the ground of the decision in AIR 1922 Mad 373 (FB) (A) and AIR 1939 PC 244 (B) is that the grantee of the inam is in the position of an owner of the part of the estate granted to him, and that would be relevant when the controversy is as to his true status, whether the dispute is between the landlord and the tenant or between the inamdar and the State. If the Inamdar is owner in relation to his tenants, it would be illogical to hold that he is not that, in relation to the State. The question is, in our opinion, concluded by S. 2(8) of Act 26 of 1948 which defines a landholder as including a darmila inamdar, and that is a statutory recognition of the doctrine laid down in - AIR 1922 Mad 373 (FB) (A) and AIR 1939 PC 244 (B) that darmila inamdars are owners of parts of an estate. The question is, in our opinion, concluded by S. 2(8) of Act 26 of 1948 which defines a landholder as including a darmila inamdar, and that is a statutory recognition of the doctrine laid down in - AIR 1922 Mad 373 (FB) (A) and AIR 1939 PC 244 (B) that darmila inamdars are owners of parts of an estate. The result then is that when the darmila inam does not relate to the entire village but only 98 to a fraction of it must be held to retain its character as part of the estate in the hands of in inamdars, and when the estate is notified under S. 1(4) of the Act, the inam will vest in the State under S. 3 (b). 11. It is next argued for the respondent that the Act makes no provisions for award for compensation to minor darmils inamdars, and that as a statute is not to be construed as taking away the property of any person unless there is a provision for payment of compensation, therefore, these inams should be held to be outside the operation of the Act. Reference was made in this connection to S. 45 of the Act under which the compensation payable in respect of an impartiable estate and Ramanathapuram is one to be apportioned after payment of debts among the members of the family. It is said that under this Section the respondent would have no right to share in it. This contention is clearly erroneous. The material provisions relating to the award of compensation are Ss. 25, 27, 37 and 44. Under S. 25, the compensation is to be determined for the estate as a whole and not separately for each of the interests therein. Section 27 lays down how the basic income in the case of Zamindaris is to be fixed. Under Ss. 27(i), it has to include one-third of the gross annual ryotwari demand in respect of all lands in the estate, and under S. 27(iv) "one-third of the average net annual miscellaneous revenue derived from all other sources in the estate specified in S. 3(b)". Thus, the income from the lands comprised in the minor which is a part of the estate is included in the total income of the Zamindari. Thus, the income from the lands comprised in the minor which is a part of the estate is included in the total income of the Zamindari. Under S. 37, the compensation payable in respect of an estate is calculated in terms of the basic income on the scale prescribed therein. Section 44 enacts that the Tribunal is to apportion this compensation among the principal landholder and any other person whose rights or interests in the estate stand transferred to the Government under S. 3(b) . There cannot be any doubt on these provisions that the darmila minor inamdar is a person who is entitled to claim compensation for the transfer of his portion of estate to the Government. Then comes S. 45 on which the respondent bases his contention. That applies only to the distribution of the compensation determined under S. 44 as payable to the principal land-holder, when he is the holder of an impartible estate. It leaves untouched the rights of minor darmila inamdars to claim compensation under S. 44. The contention of the respondent that the Act provides no compensation to them, and that they should therefore be held to fail outside the Act must accordingly be rejected. 12. (2) That brings us on to the second question whether a post-settlement minor inam is a right in land created by a land-holder within the intendment of S. 20 of the Act. At the very outset, it seems somewhat inconsistent to hold that a darmila minor inam is a part of an estate, and also that is governed by S. 20. If it is part of an estate, it must automatically vest in the Government under S. 3(b). But if it falls within S. 20 the title to it will continue to stand in the inamdar with a right in the Government to take action under the third proviso, subject to the conditions laid down therein. It was argued for the respondent that S. 3 operates on its own terms only "save as otherwise expressly provided herein", and that S. 20 was such a provision. It is somewhat difficult to follow this argument, because if S. 20 applied to darmila minor inams, then they could never fall within the operation of S. 3(b). It was argued for the respondent that S. 3 operates on its own terms only "save as otherwise expressly provided herein", and that S. 20 was such a provision. It is somewhat difficult to follow this argument, because if S. 20 applied to darmila minor inams, then they could never fall within the operation of S. 3(b). And how is this result to be reconciled with the conclusion that they are parts of the estate, and that the inamdar is a landholder for purposes of the Act. 13. But it is argued for the respondent that the words "rights in land created by landlord" are of the widest import & would take in darmila minor inams. The point for decision is whether this contention is correct. We start with this that a darmila minor inamdar is a landholder as defined in S. 2(8) of the Act, and he is that, by reason of his being the owner of a part of the estate. Can such a person be held to be one who has obtained a right in the land from the landholder within S. 20? The Act makes a clear distinction between estates held by landholders and rights and interests held by other person in or over estate. Section 3 (b) enact that when there is a notification under S. 1(4), the entire estate shall stand transferred to the Government and vest in it. We have held that the part of the estate belonging to a darmila inamdar would vest in the Government. Section 3(c) provides that on notification all rights in or over the estate shall cease and terminate. Section 3(b) and S. 3(c) deal with two distinct matters which may respectively be described in broad terms as ownership of the estate and rights in or over estate not amounting to 99 ownership, and these two categories are mutually exclusive. Now, turning to S. 20, it protects rights in land by way of lease or otherwise created by the landholder before the notified date. In this context, and having regard to the distinction between estates under S. 3(b) and rights over estates under S. 3(c), the rights mentioned in S. 20 can only refer to the rights dealt within S. 3(c), & not to ownership which in within S. 3(b). In this context, and having regard to the distinction between estates under S. 3(b) and rights over estates under S. 3(c), the rights mentioned in S. 20 can only refer to the rights dealt within S. 3(c), & not to ownership which in within S. 3(b). When, therefore, the transaction for which protection is claimed under S. 20 is one which vests ownership of the estate or a portion thereof in the transferee, it will fall outside the section. In other words S. 20 has no application to transaction by which a person becomes a landholder by reason of ownership of even a part of the estate being transferred to him, & that being the character of a darmila minor inam it is not protected by S. 20. 14. There are also indications in the language of S. 20 pointing to the same conclusion. Section 20(2) provides that the persons whose rights are terminated under the proviso to S. 20(1) shall be entitled to compensation having regard to the value of the right which is terminated and the unexpired portion of the period for which the right is created. These words are more appropriate to connote rights which are to be exercised for specified periods, such as lease or contract for the exploitation of mines a forestsk for a kterkm than "ownership of the estate." 15. There is one other consideration, which lends support to this conclusion. The object of the Act was to establish direct relationship between the State and tillers of the soil, and to abolish all intermediate tenures. In Madras, the rights and obligations of intermediate tenure holders where regulated by the Madras Estates Land Act, and under that Act the intermediaries consistent not merely of the holders of the estates as defined in S. 3 (2) of that Act but also holders of post-settlement minor inams as settled by decisions of the highest authority. If the purpose of the Act is to be fully achieved, it would be necessary to abolish not merely estates as defined in S. 3(2) of the Madras Estates Land Act but also darmila minor inams. But if the contention of the respondent is to be accepted, it is only the estates mentioned in S. 3(2) that will, on notification, vest in the Government and not the minor inams. But if the contention of the respondent is to be accepted, it is only the estates mentioned in S. 3(2) that will, on notification, vest in the Government and not the minor inams. These will continue to be held by the inamdars under S. 20 until they are terminated in accordance with the proviso therein and, service as islets in the landscape even after the parent estates have disappeared from the scene. The legislation must to this extent be held to have failed to achieve its purpose. And this is not all. If the contention of the respondent is correct, then the minor inamdars will not merely be unaffected by the Act but will actually be better off for it. Under S. 3(a) of the Act the Madras Estates Land Act stands repealed on and from the notified date, and as it is by virtue of this Act that the tenants become entitled to occupancy rights, the inamdars would on notification, be free to enject tenants, and settle their own terms with them. We cannot accede to a contention which results not merely in the frustration of the object of the Act but further produces consequences, the reverse of what were intended. On the other hand, the contention of the appellant that minor inams fall outside S. 20 and would vest straightaway in the State under S. 3(b) will have the effect of extinguishing the rights of the inamdars, and enabling the State to issue ryotwari pattas to the tenants in occupation. We prefer to accept this contention, as it fully effectuates the intention of the legislature. In the result, we must hold that the one-sixteenth portion of the village of Karupur forming a darmila inam will vest in the Government under S. 3(b) of the Act, and that the only right of the inamdars is to share in the compensation under the terms of the Act. The petition of the respondent is so far as it relates to this inam must be dismissed. 16. This appeal is accordingly allowed, and in accordance with the terms of the certificates granting leave, the appellant will pay the costs of the respondent in this Court. The parties will bear their own cots in the Court below. Appeal allowed. For Citation : AIR 1956 SC 94 Vikas Info Solutions Pvt. Ltd.