AYIDRU v. STATE OF KERALA — 1976 DIGILAW 88 (KER)

Judgment :- 1. A common question relating to the interpretation and scope of S.84 of the Kerala Land Reforms Act, 1963 (Act 1 of 1964) hereinafter called the Act, arises in these civil revision petitions. Shortly stated the question is whether in view of the specific exception contained in S 84 in respect of voluntary transfers by way of gifts in favour of one's son or daughter or the son or daughter of one's predeceased son or daughter, the lands covered by transactions of this kind effected by a person subsequent to 1-1-1970 are liable to betaken into account for purposes of fixation of the ceiling area of the donor and for determining the extent of the excess land to be surrendered by him. In Narayanan Namboodiri v.Taluk Land Board. Perintalmanna,1975 KLT. 171 a Division Bench of this court of which one of us (Chandrasekhara Menon, J.)was a member had occasion to consider and pronounce upon this question. It was held in that case that since under S.83 and 85 every person owning or holding land in excess of the ceiling area on the date notified (1-1-1970) has to surrender such excess lands to the Government, any transfer of the excess land effected by such a person to whomsoever and in whatever manner can only be subject to the liability of the transferor to surrender the excess land and that the said liability to surrender excess lands on the basis of the state of affairs existing on 1-1-1970 cannot be avoided by any mode of transfer, and even though such transfers may not be' invalid under S.84 for all purposes they will have to be ignored in the matter of fixing the ceiling limits. The correctness of the said view expressed by the Division Bench is challenged by the revision petitioners and these cases have been therefore been referred to a Full Bench. 2. Before proceeding to consider the question of law we shall briefly state the facts that have given rise to these revision petitions. The revision petitioner in C.R.P.No.566 of 1975 filed a statement dated 29-5-1972 before the Land Board under S.85(2) of the Act furnishing details of the lands held by bis family consisting of himself, his wife and two minor children. The revision petitioner in C.R.P.No.566 of 1975 filed a statement dated 29-5-1972 before the Land Board under S.85(2) of the Act furnishing details of the lands held by bis family consisting of himself, his wife and two minor children. The Taluk Land Board, Perintalmanna to whom the said statement was transferred by the Land Board under S.85(5) of the Act, got the particulars verified and prepared a draft statement of the lands to be surrendered by the revision petitioner. The said draft statement, together with a notice in Form 3 under R.1?(1) of the Kerala Land Reforms (Ceiling) Rules, 1970 was issued to the revision petitioner and his wife calling upon them to file their objections, if any, against the extent and identity of the lands indicated in the draft statement as the lands to be surrendered by the petitioner and to appear for a hearing before the Taluk Land Board on 21-12-1974. In response to the said notice the revision petitioner appeared before the Taluk Land Board and filed an objection petition wherein, inter alia, he took the plea that an extent of 2.98 acres had been transferred by him by way of gift in favour of his children in 1973 as per a gift deed registered as document No. 485 of 1973 in the Sub Registry Office, Perintalmanna. The Taluk Land Board rejected the said contention by applying to the case the dictum laid down by the Division Bench in Narayanan Namboodiri v. Taluk Land Board, Perintalmanna 1975 KLT.171, and ordered that an extent of 1.12 acres should be surrendered to Government by the revision petitioner as excess land. The petitioner challenges the legality and correctness of the said order passed by the Taluk Land Board. 3. C. R. P. No. 970 of 1975 arises out of an order passed by the Taluk Land Board, Kuttanad holding that a transfer effected by the revision petitioner of 10 acres of land in favour of his sons as per a gift deed dated 25 31970 was to be ignored in fixing the petitioner's ceiling area and in determining the extent of excess land to be surrendered by the petitioner and that the petitioner is consequently liable to surrender an extent of 2 acres 44.541 cents. The petitioner contends that since the deed of gift executed by him falls within the excepted category mentioned in sub-section (1) of S.84 the Taluk Land Board was in error in ignoring the said transaction and treating the lands comprised in the gift deed as properties owned or held by the petitioner. 4. In Chapter III of the Act consisting of S.81 to 98A the legislature has enacted a comprehensive and self-contained code providing for the fixation of ceiling on land holdings, the imposition of restrictions on ownership and possession of land in excess of the ceiling area, compulsory surrender of excess lands to the Government, and the disposal of such excess lands by the process of granting assignments on registry in favour of landless agricultural labourers, small holders who are not entitled to resume land, and other landless persons. The various sections in this Chapter form integral parts of one composite scheme and hence, before attempting to determine the object, scope or effect of any one of these provisions it is necessary that the true nature and purpose of the said scheme should first be ascertained by a combined reading of all the component sections so that the setting in which the particular provision which is coming up for interpretation occurs in the statute can be correctly understood. It will be a totally wrong approach if one were to read and interpret the particular section in isolation from the rest of the provisions contained in the Chapter. 5. Chapter III of the Act begins with S.81 which only provides for certain exemptions and enumerates the categories of lands to which the provisions of the Chapter will not apply S.82 lays down the principles governing the fixation of the land ceiling area in respect of different categories of persons, such as adult unmarried persons, a family consisting of a sole surviving member, a family consisting of two or more but not more than five members, a family consisting of more than five members etc. Next comes the crucial provision in S.83 which lays down that with effect from such date as may be notified by the Government in the Gazette, no person shall be entitled to own or hold or to possess under a mortgage, lands in the aggregate in excess of the ceiling area. Next comes the crucial provision in S.83 which lays down that with effect from such date as may be notified by the Government in the Gazette, no person shall be entitled to own or hold or to possess under a mortgage, lands in the aggregate in excess of the ceiling area. That is followed by S.84 which provides that all voluntary transfers effected after the publication of the Kerala Land Reforms Bill, 1963 in the gazette otherwise than in certain modes specified in that section shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid. Sub-section (1) of S.85 lays down in mandatory terms that where a person owns or holds land in excess of the ceiling area on the date notified under S.83 such excess land shall be surrendered as provided in the subsequent parts of the said section. For our present purpose it is unnecessary to refer in detail to the elaborate provisions contained in sub-sections (2) to (9) of S.85. Briefly stated, those sub-sections provide that persons owning or holding lands in excess of the ceiling area should file statements before the Land Board intimating the location, extent and other prescribed particulars within the specified period, that the statements so filed should be transferred by the Land Board to the concerned Taluk Land Boards and that after due verification of the particulars and after hearing parties the Taluk Land Board should determine the extent and other particulars of the lands to be surrendered to Government. S.86 lays down that on such determination being made by the Taluk Land Board of the extent and other particulars of the lands to be surrendered by a person under S.85, the ownership or possession or both, as the case may be, of the lands shall vest in the Government free from all encumbrances and that the Taluk Land Board shall issue an order to that effect. The Section further provides that on receipt of the order of the Taluk Land Board containing such declaration the person concerned shall surrender the excess land to the Government in the manner prescribed. S.87 deals with cases where persons acquire lands after the notified date by any transaction inter vivos, such as gift, purchase, mortgage etc. or by bequest or inheritance etc. S.87 deals with cases where persons acquire lands after the notified date by any transaction inter vivos, such as gift, purchase, mortgage etc. or by bequest or inheritance etc. and in consequence thereof the total extent of land owned or held by such person exceeds the ceiling area. In respect of such cases the Section lays down that such excess land which the persons come by subsequent to the notified date should also be surrendered to the prescribed authority and that such lands also shall become vested in the Government under S.86. S.88 to 93 make provision for payment of compensation to persons surrendering excess lands. Besides laying down the rates and the mode of computation of the compensation they provide for the preparation of a final compensation roll by the Land Tribunal and the ultimate payment of the compensation on the basis of the said final roll. S.95 provides that a person who does not possess any land or possesses only less than one acre of land in extent may apply to the Land Board for assignment on registry. S.96 empowers the Land Board to assign on registry the excess lands vested in the Government in favour of landless agricultural labourers and small holders or other landlords who are not entitled to resume any land, subject to the condition that lands in which there are kudikidappukars should be assigned only in their favour and that only the remaining areas should be assigned to the aforementioned two categories. S.97 states that the purchase price of the lands assigned on registry shall be payable by the assignees at the rates specified in Schedule TV either in lump or in sixteen equal annual instalments and that where the payment is by instalments the amount outstanding will bear interest at the rate of 41/2% per annum. S.98 provides that until the excess lands which have become vested in the Government are assigned under S.96, the Land Board should manage such lands and make arrangements for their cultivation and protection. S.98A which is the last section in Chapter III merely lays down that for the purposes of Chapter III of the Act the term 'person' shall not include a co-operative society or other institutions of the types therein specified. 6. S.98A which is the last section in Chapter III merely lays down that for the purposes of Chapter III of the Act the term 'person' shall not include a co-operative society or other institutions of the types therein specified. 6. When the above provisions contained in Chapter III of the Act are read as a whole it becomes evident that the underlying legislative intent is that the imposition of the ceiling on land holdings with the consequential obligation to surrender to Government all the lands owned or held by persons in excess of the ceiling area should become fully effective on the notified date, namely 111970 on the basis of the facts and circumstances then obtaining and that all the rights and obligations pertaining to the said matter should become crystallised on the said date, though the actual working out or enforcement of such rights and liabilities is left to be carried out subsequently in accordance with the procedure laid down in that behalf. S.82 which prescribes the ceiling limits applicable to the different categories of persons, S.83 which effectively enforces the ceiling by declaring that no person shall be entitled to own or hold lands in excess of the ceiling area with effect from the notified date, S.85 (1) which creates a mandatory obligation for all persons owning or holding lands in excess of the ceiling area on the notified date to surrender such excess land to the Government and sub-section (1) of S.86 which lays down that on the determination by the Taluk Land Board of the extent and particulars of the lands to be surrendered under S.85 the ownership or possession or both, as the case may be, of those lands shall vest in the Government free from all encumbrances, are the four cardinal provisions in Chapter III of the Act giving rise to substantive rights and liabilities. S.87 in so far as it creates an obligation to surrender any excess land obtained by a person by gift etc. after the notified date may also be treated as belonging to the same category. The remaining provisions that are contained in S.84, sub-sections (2) to (9) of S.85, S.85A and sub-sections (2) to (6) of S.86 are merely ancillary in character and they only lay down the machinery and the procedure for effective implementation of the substantive measures enacted in S.82, 83, 85(1) and 86(1). The remaining provisions that are contained in S.84, sub-sections (2) to (9) of S.85, S.85A and sub-sections (2) to (6) of S.86 are merely ancillary in character and they only lay down the machinery and the procedure for effective implementation of the substantive measures enacted in S.82, 83, 85(1) and 86(1). These subsidiary provisions are designed to aid and promote the successful and speedy fulfilment of the legislative purpose of imposition of ceiling on land holdings and take over of the excess lands as on the notified date. Thus, the legislature took note of the possibility that after the proposal to introduce a ceiling on land holdings had been made known to the public when the Kerala Land Reforms Bill, 1963 was published in the gazette, several transactions of transfers of land might have been brought about with a view to circumvent the provisions of the contemplated legislation. It is to meet the said situation that S.84 has been enacted which lays down that all such voluntary transfers have that taken place subsequent to the date of publication of the Kerala Land Reforms Bill, 1963 otherwise than in the limited modes specified in the section shall be deemed to be transfers calculated to defeat the provisions of the Act and shall be invalid. From the setting in which S.84 appears it is perfectly obvious that the legislature has enacted this Section only with a view to render the provisions of S.83 and 85(1) fully effective. This is the objective sought to be achieved by the Section by providing that for purposes of calculation of the ceiling area and the determination of the extent of excess land to be surrendered by a person account will be taken not merely of the lands actually owned and possessed by him on the notified date (111970) but also of lands voluntarily transferred by him subsequent to the date of publication of the Kerala Land Reforms Bill, 1963 by transactions not falling within the excepted categories mentioned in that Section. When we look at S.84 in its correct perspective there is absolutely no scope for interpreting or understanding its provisions as conferring on persons a right to transfer away their excess lands after the notified date by effecting transactions of the excepted categories specified in the said Section. 7. When we look at S.84 in its correct perspective there is absolutely no scope for interpreting or understanding its provisions as conferring on persons a right to transfer away their excess lands after the notified date by effecting transactions of the excepted categories specified in the said Section. 7. As already observed by us, the scheme of the Act is to peg down to a date certain, namely the notified date, the rights and obligations relating to the fixation of the ceiling area and the surrender of excess land. S.83 lays down in unambiguous terms that with effect from the notified date no person shall be entitled to own or hold or possess under a mortgage, lands in the aggregate in excess of the ceiling area. The direct result of this provision is that the extent of land which a person is entitled to own or hold on the basis of the principles laid down in S.82 became statutorily fixed on the notified date. Any land owned, held or possessed by him beyond the permissible extent automatically became 'excess land' in his hands with effect from the notified date. Subsection (1) of S.85 creates a mandatory obligation that every person should surrender to Government all the 'excess land' which was being owned or held by him on the date notified. This liability to surrender the excess land irrevocably accrued on the notified date on the basis of the state of things obtaining on that date. We find it impossible to construe S.84 as a provision designed to enable persons who have already incurred the aforesaid statutory liability to surrender to Government the excess lands which were owned or possessed by them on 111970 to escape from that obligation by effecting voluntary transfers of such excess lands by transactions of the excepted types enumerated in S.84. 8. As already noticed, under S.83 and 85 the ceiling area applicable in respect of a person and the extent of the excess land to be surrendered by him have to be determined on the basis of his ownership and possession of lands as on 111970. 8. As already noticed, under S.83 and 85 the ceiling area applicable in respect of a person and the extent of the excess land to be surrendered by him have to be determined on the basis of his ownership and possession of lands as on 111970. But S.84(1) provides that all voluntary transfers effected by such person after the date of publication of the Kerala Land Reforms Bill otherwise than in the excepted modes specified therein shall be treated as invalid and the lands covered by such transfers should also be treated as having been under the ownership and possession of the transferor on the notified date (111970). Certain categories of voluntary transfers are excepted from the operation or this provision and the result is that voluntary transfers of the excepted varieties effected prior to 111970 will be treated as fully valid and the lands covered by such transfers will not be treated as properties belonging to the transferor on the notified date for purposes of determining his ceiling area and the extent of the excess land to be surrendered by him. The position is, however, different in respect of such transfers effected after 111970. The ceiling area applicable to a person and the extent of his liability to surrender excess land having become crystallised on 11 1970 on the basis of the relevant facts and circumstances then existing, except to the extent indicated in S.87, any subsequent changes that might come about, in whatsoever manner, in regard to the extent of lands owned or possessed by a person are of no relevance in regard to the said matter. The obligation to surrender the excess land that was owned or possessed by a person as on 1 1 1970 cannot, therefore, be in any way affected by voluntary transfers even of the excepted varieties made subsequent to the said date. Notwithstanding any such transfers, the transferor will continue to be liable to surrender to the Government the full extent of the excess land that was in his ownership and possession as on 111970. What then is the effect of the saving provision in S.84(1) in respect of such transfers of the excepted varieties entered into after 111970? Notwithstanding any such transfers, the transferor will continue to be liable to surrender to the Government the full extent of the excess land that was in his ownership and possession as on 111970. What then is the effect of the saving provision in S.84(1) in respect of such transfers of the excepted varieties entered into after 111970? In our opinion, its effect is that while these transfers will not prevail against the claim of the State Government to enforce against the transferor his liability for surrender of the full extent of the excess land calculated as on 111970, the transactions will be treated as valid in all other respects, whereas all other kinds of transfers are to be treated as wholly invalid. This means that subject only to the paramount claim of the State Government to obtain a surrender of the full extent of the excess land from the transferor, for satisfying which the lands covered by these transfers will also be treated as continuing to belong to him, in all other respects, such transfers will be treated as valid. If the transferor has retained with himself sufficient quantity of other lands to satisfy his liability to surrender the excess lands computed as on 111970, such excepted types of transfers made by him after 111970 will remain totally unaffected; that is because under S.85(2) of the Act, as well as under the Kerala Land Reforms (Ceiling) Rules, an opportunity is to be given to the person owning or holding lands in excess of the ceiling area to exercise his choice as to which lands he would retain and which lands he would surrender. In a case where transfers of the excepted variety have taken place subsequent to 111970, if the transferor offers to surrender other lands of adequate extent to satisfy his liability under S.85, the Taluk Land Board will have to accept such offer and there will be no justification for interfering with the transfers since they are not legally invalid. Difficulty will, however, arise if the transferor while effecting the transfers of the aforementioned variety subsequent to 111970, has not retained with himself sufficient quantity of land to satisfy his liability for surrender of excess land under S.85. Difficulty will, however, arise if the transferor while effecting the transfers of the aforementioned variety subsequent to 111970, has not retained with himself sufficient quantity of land to satisfy his liability for surrender of excess land under S.85. In such a case the transfers will not prevail against the statutory liability which had already accrued to the transferor under S.85 prior to the date of the transactions and the transfers will be deemed to have taken effect only subject to the said liability, for surrender of the excess land; in other words, in such cases, for the limited purpose of enforcement of the transferor's liability under S.85, the lands covered by the transfers will be treated as continuing to belong to the transferor and as constituting excess lands in his hands. As already mentioned, for all other purposes such transfers of the excepted variety effected after 1 11970 will be treated as fully valid, whereas all other types of transfers not covered by the exceptions mentioned in clauses (i) to (iv) of S.84 (J) are to be treated as invalid and wholly ignored. 9. The Division Bench in Narayanan Namboodiri v. Taluk Land Board, Perintalmanna,1975 KLT.171, has also expressed the view that voluntary transfers of land effected by a person after 111970 in whatsoever manner could only be subject to the liability of the transferor to surrender his excess lands and to that extent we are in complete agreement with that decision. But, with respect, we do not find it possible to accept as correct the further statement made by the Division Bench that S.84 is intended only for the purpose of dealing with transfers that have been effected between the date of publication of the Kerala Land Reforms Bill, 1963 and the date notified under S.83 of the Act. The primary purpose of S.84 is to invalidate all transactions of transfer other than those falling within the excepted varieties, by directing that they shall be deemed to be transfers calculated to defeat the provisions of the Act. We find nothing in the Section to warrant the restricted construction that its provisions will apply only in respect of transactions of transfer which took place prior to 111970. We find nothing in the Section to warrant the restricted construction that its provisions will apply only in respect of transactions of transfer which took place prior to 111970. If the intendment of the Section should be fully effectuated the invalidating provision contained therein must continue to operate even after the notified date, because, otherwise, persons will be left free to transfer away their lands after the notified date, thereby facilitating the commission of the very mischief that is sought to be prevented by the Section. In our opinion, the correct construction to be placed on S.84 (1) is to understand the said provision as being fully operative even after the notified date, but the benefit of the exception contained therein will, in the case of excepted transfers effected after 111970, only entitle those transactions to be treated as valid subject to the condition that they will not prevail against the Government's claims for enforcement of the statutory obligation already incurred by the transferor to surrender the full quantity of the excess land owned or possessed by him as on 111970. 10. In the light of the legal position explained above, it is not possible to accept the contention of the revision petitioners that the lands covered by the transactions of gift executed by them in favour of their sons subsequent to 1-1-1970 ought not to have been taken into account by the Taluk Land Board for the purposes of the fixation of the ceiling area applicable to the petitioners and for determining the extent of excess lands to be surrendered by them. The revision petitions are, therefore, devoid of merits and will accordingly stand dismissed. The parties will bear their respective costs. Chandrasekhara Menon, J.: In view of the fact that I was a member of the Bench which had decided Narayanan Namboodiri v. Taluk Land Board, Perintalmanna (1975 KLT.171), I think I should add a few words of my own though I am in general agreement with what has been said by my learned brother Eradi J. in his judgment. Chandrasekhara Menon, J.: In view of the fact that I was a member of the Bench which had decided Narayanan Namboodiri v. Taluk Land Board, Perintalmanna (1975 KLT.171), I think I should add a few words of my own though I am in general agreement with what has been said by my learned brother Eradi J. in his judgment. In respect of the particular question that arises for decision in this case what the Division Bench said was this: "Under S.83 of the Act, with effect from such date as may be notified by the Government in the gazette, no person shall be entitled to own or hold or to possess under a mortgage lands in the aggregate in excess of the ceiling area. The date so notified is 1-1-1970. Where a person owns or holds land in excess of the ceiling area on the date notified under S.83, such excess lands shall be surrendered as prescribed in S.85. Therefore any transfer a person effects of such excess land to whomsoever and in whatever manner, could only be subject to the liability of the transferor to surrender his excess land. The consequences arising from the transferor's liability to surrender his excess lands, the extent and identity of which are to be determined under S.85 (5) (c), on the basis of state of affairs existing as on 1-1-1970, cannot be avoided by any mode of transfer though such transfer may be valid under S.84 or by the fact that at the time of transfer, the transferor continued to be the owner of the property (as the excess land had not vested in the government under S.86 because no determination under S.85 (5) had taken place then). S.83 and 85 make it clear that the ceiling area will have to be determined on the basis of ownership and possession as on 1-1-1970. Such transfer may not be invalid for all purposes; but they will certainly have to be ignored in the matter of fixing the ceiling limit. S.83 and 85 make it clear that the ceiling area will have to be determined on the basis of ownership and possession as on 1-1-1970. Such transfer may not be invalid for all purposes; but they will certainly have to be ignored in the matter of fixing the ceiling limit. S.84 appears to us to be intended for the purpose of dealing with transfers that have been effected after the date of publication of the Kerala Land Reforms Bill, 1963 in the gazette up to the date notified as per S.83 from which date no person shall be entitled to own or hold or to possess under a mortgage, in the aggregate in excess of the ceiling area. S.87 of the Act which states that where any person acquires any land after the date notified under S.83 by gift, purchase, mortgage with possession, lease, surrender or any other kind of transfer inter vivos or by bequest or inheritance or otherwise and in consequences thereof the total extent of land owned or held by such person exceeds the ceiling area, such excess shall be surrendered does not run counter to the view we are taking but is in conformity with the same." On a reading of all the relevant sections in Chapter III of the Kerala Land Reforms Act, I do certainly now see that I was not quite right in stating in that case on behalf of the Bench that S.84 is intended for the purpose of dealing with transfers that had been effected between the date of publication of Kerala Land Reforms Bill, 1963 in the Gazette and the notified date as per S.83 of the Act. I have no hesitation in agreeing with the opinion that the effect of the saving provision in S.84 (1) is that while transfers of the excepted varieties entered into after 11-1970 will not prevail against the claim of the State Government to enforce against the transferor his liability for surrender of the full extent of the excess land calculated as on 111970, the transaction will be treated as valid in all other respects, whereas all other kinds of transfers are to be treated as wholly invalid. However the Division Bench ruling aforementioned did not lay down in positive terms that S.84 will apply only in respect of transactions of transfer which took place prior to 1 1 1970. However the Division Bench ruling aforementioned did not lay down in positive terms that S.84 will apply only in respect of transactions of transfer which took place prior to 1 1 1970. Subject to what is stated above I am in full agreement with the judgment of Eradi J. delivered on behalf of the Bench.