GOHIL JESANGBHAI RAYSANGBHAI & ORS. versus STATE OF GUJARAT & ANR.

6. As we have noted earlier the Tenancy Act was passed as a part of the agrarian reform. The Act as such does not permit transfer of agricultural land for non-agricultural purpose, and the same is barred under Section 63 of the Act. That section permits such a transfer only in certain contingencies as· H provided under that Section. Section 43 with which we are GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] concerned in the present matter and which appears in Part Ill of Chapter Ill of the Act. Chapter Ill provides for Special rights and privileges of tenants, and contains provisions for distribution of land for personal cultivation. Part 111, thereof, provides for restrictions upon holding of land in excess of ceiling area. Section 43 has to be seen in this context.

7. The principal part of Section 43 lays down that the land which is purchased by a tenant under the various Sections referred to in Section 43 shall not be transferred in any manner except as permitted in Section 43. The original Section 43 did not contain any such exception. The Gujarat (Amendment) Act No. XVI of 1960 introduced the words "on payment of such amount as the State Government may by general or special order determine" in Section 43. The constitutionality of the section was examined by a Division Bench of the Gujarat High Court in Shashikant Mohan/al Vs. State of Gujarat reported in AIR 1970 Gujarat 204. The Court held that the State is theoretically the owner of all the land, and occupants hold these lands under the State. It was argued before the said Division Bench that this section d9es. not lay down any guidelines. However, the High Court held that the amount as introduced under the Amendment was the charge which the State was seeking, for permitting the transfer since the occupancy right as such was not transferable as of right.

8. The validity of the above amendment of 1960 came up for consideration before the Supreme Court in the case of Patel Ambalal Gokalbhai Vs. State of Gujarat reported in 1982 (3) SCC 316. This Court held that the Amendment was protected under the 9th Schedule to the Constitution, and therefore immune from any challenge. Subsequently, by Amendment Act No. XXX of 1977, the words "in consideration of payment of such amount. .. " came to be substituted in place of the words "on payment of such amount. .. " Thus, the section now permits such a transfer by the tenant after the appropriate amount as determined by the State Government by a general or special A order is paid by way of consideration, and only after a previous sanction is obtained from the Collector for effecting the transfer. Thus, the State Government has to lay down by general or special order the payment which is required to be made for such a transfer. If the agriculturist is seeking such a transfer, B he has to make the necessary payment, and the transfer will be permitted only after a prior sanction is obtained from the Collector. The transfer is however not by way of a right.

9. As far as the determination of this amount is concerned, the same was earlier entrusted to the District Level Committee C or the State Level Committee as per the Government Resolution dated 15.1.1998. However, the Government found that much time used to be consumed for determination of this price at different stages. Besides, uniformity had to be brought in with respect to determination of valuation in particular areas. D Therefore, the State Government decided to adopt the approach of valuation based on Jantri, i.e. the list of rates containing the minimum valuation of land as per the Government Resolution dated 20.12.2006. It is for this purpose that the aforesaid resolution dated 4.7.2008 was passed. As E can be seen from paragraph 4 of this Resolution, now the premium is required to be recovered on the basis of the Jantri, and all the powers concerning the transfers in the entire District are vested in the Collector. The Jantri contains the rates which are fixed for the purpose of valuation of the land for levying the F stamp duty under the Bombay Stamp Act. Those rates in the Jantri are incorporated by virtue of this Resolution for the purpose of permitting these transfers. Submissions of the appellants

10. The Resolution provides that the transfer shall be permissible only after 15 years of possession of the land by the tenant. The main grievance of the appellants is that for transfer of such lands in the entire State (except Kutch) from agricultural to non-agricultural purposes, the premium payable H shall be 80 per cent of the price received by the agriculturists GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] as determined as per the Jantri rates. Thus, whatever may be the price mentioned in the document of transfer, the valuation of the land will be done as per the rates in the Jantri, and 80 per cent of such amount will be payable to the State for permitting such a transfer. The contention of the appellants is that the requirement of the payment of consideration at such a high rate amounts practically to expropriation, and is violative of Article 300A of the Constitution of India, which lays down that no person shall be deprived of his property save by authority of law. Such high premium is arbitrary, unreasonable and unconscionable. It is also pointed out that the applications for c transfer are not decided quickly enough. They are kept pending for a long time, whereby, the agriculturists seeking to transfer the land suffers.

11. If we take two of the twelve cases which are before us, we can see the submissions advanced on behalf of the appellants in a factual matrix. In Civil Appeal No.4129/2012 the appellant Savitaben represented by Mr. Ahmedi is an agriculturist in Surat. She made .an application for conversion for non-agricultural purpose on 16.4.2003. She is having a land · <1dmeasuring about 4,875 sq. mts. at plot No. 65 in revenue ::.,urvey no. 90. Another application in the same survey no. was decided on 4.7.2005 at the rate of premium of Rs. 700 per sq. mts. The above referred Resolution came to be passed on 4.7.2008. Her application though made earlier, was not decided until then. It was decided thereafter, and she was asked to pay the premium at the rate of Rs.12000 sq. mts by order dated 7.8.2008 passed by the Collector on the basis of circle rates. The case of one Kashiben, represented by Mr. Bharat Patel, is similar. She is the appellant in Civil Appeal No.4130/2012, and is having her property at Vadodara. It is her submission that because of the application of this Resolution, exorbitant amount is being sought. The application is not being decided in reasonable time. The land is being wasted and is being used by other people for dumping garbage.

12. It was submitted on behalf of most of the appellants that the land was in the possession and cultivation of their family from their forefather's time, and they had a stake in the land. It was submitted by them that they had paid the price to purchase the land under Section 32G of the Tenancy Act. The land having B been purchased for a price, it is not a largess given by the State. Reliance was placed on paragraph 43 and 44 of the judgment in Nagesh Bisto Desai Vs. Khando Tirmal Desai reported in AIR 1982 SC 887 to submit that the purpose of prior permission was only to protect the tenant from selling the land c at a throw away price, and not for the State to profiteer. It was then submitted that the amount to be charged under Section 43 was at the highest in the nature of a fee and not a tax and, therefore, it has to be proportionate. The Jantri rates were being applied in an arbitrary manner, and the premium at 80 per cent 0 was unconscionable. (It must however be noted that it was pointed out on behalf of the Government that after the judgment of the High Court, the premium has been reduced to 40 per cent.) It was also submitted that Rule 25C of the rules framed under the Act gives guidelines, and when read with that Rule, Government cannot charge any dis-proportionate amount under E Section 43 of the Act.

13. It was submitted that it is the date of the application which should be considered as the material date for deciding the valuation of the property, and not the date of the decision F on the application by the Collector. Besides, the decision on the application cannot be indefinitely delayed. Reliance was placed on paragraph 8, 11 and 12 of the judgment of this Court in Union of India Vs. Mahajan Industries Ltd. reported in 2005 (10) sec 203 to submit that date of application is the material G date. Reliance was also placed on the judgment of this Court in State of Gujarat Vs. Patel Raghav Natha reported in 1969 (2) sec 187 (para 11 and 12) to submit that the decisions in revenue matters must be taken within reasonable time. In the facts of that case it was held that it must be arrived at within H 90 days. GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.]

14. On the concept of reasonableness, reliance was placed on paragraph 38 of the judgment in K.B. Nagur, M.D. (Ayurvedic) Vs. Union of India reported in 2012 (4) SCC 483. It was held therein that when no specific time limit is provided for taking the decision, the concept of reasonable time comes in. It was submitted that good governance required a timely decision and for that judgment of this Court reported in Delhi Airtech Services Pvt. Ltd. Vs. State of Uttar Pradesh reported in 2011 (9) sec 354 relied upon. (It was also submitted that Section 43 should be read alongwith Section 69 of the Act.) The period for decision making should at the highest be 90 c days from the date of application. Reply on behalf of the respondents

15. Mr. Nariman, learned senior counsel appearing for the respondents submitted that essentially the amount which was being charged under Section 43 (as it stands now) was by way of consideration for the permission to transfer the agricultural land for non agricultural purpose. This amount which was being · charged was a premium to be paid to the State, and this is because the land theoretically belongs to the State, and all the cultivators are holding the land under the State. The kind of authority which the tenant acquired after making the necessary payment for purchase of the land under the statute was to cultivate the land himself. The land was not to be put to non agricultural use, or else the tenant would lose the land under the provision of the statute, and it would be given to those who needed it for personal cultivation. In his submission, the premium was therefore justified. He informed us that after the impugned judgment of the High Court, the premium has been brought down to 40%. In his submission, the Jantri rate had to be applied on the date of sanction as the Section provided for a prior sanction. He, however, accepted that the decision on the application for conversion to non-agricultural purpose has to be in reasonable time. A Consideration of the submissions

16. We may at this stage refer to the judgment of the Division Bench of the Gujarat High Court in Shashikant Mohan/al (Supra) by P.N.Bhagwati, CJ as he then was in the B High Court. With respect to this co-relation between Sections 32 to 32R of this statute and Section 43, the Division Bench observed as follows:- c "7. The Act as originally enacted in 1948 was intended to regulate the relationship of landlord and tenant with a view to giving protection to the tenant against exploitation by the landlord but in 1956 a major amendment was made in the Act introducing a radical measure of agrarian reform. The Legislature decided that the tiller of the soil should be brought into direct contact with the State and the intermediary landlord should be eliminated and with that end in view, the Legislature introduced a fasciculus of sections from Section 32 to S. 32-R and S. 43. These sections came into force on 13th December 1956 and they provided for the tenant becoming deemed purchaser of the land held by him as tenant. Section 32 said that on 1st April 1957 every tenant shall, subject to certain exceptions which are not material for the purpose of the present petitions, be deemed to have purchased from him landlord, free from all encumbrances subsisting thereon on the said day, land held by him as tenant provided he was cultivating the same personally. If the landlord bona fide required the land either for cultivating personality or for any non- agricultural purpose, he could after giving notice and making an application for possession as provided in Section 31, sub-section (2), terminate the tenancy of the tenant subject to the conditions set out in Sections 31-A to 31-D but if he did not take steps for terminating the tenancy of the tenant within the time prescribed in Section 31, the tenant became the deemed purchaser of GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] the land on 1st April 1957. If the landlord gave notice and made an application for possession within the time prescribed in Section 31, the tenant would not become the deemed purchaser of the land on 1st April 1957 but he would have to await the decision of the application for possession and if the application for possession was finally rejected, he would be the deemed purchaser of the land on the date on which, the final order of rejection was passed. Now if the tenant becomes deemed purchaser of the land, there would be no difficulty, for the intermediary landlord would then be eliminated and c direct relationship would be established between the State and the tiller of the soil. But what is to happen if the tenant expresses his unwillingness to become deemed purchaser of the land? The Legislature said that in such a case the tenant cannot be permitted to continue as a tenant he would have to go out of the land. If the tenant is permitted to continue as a tenant, the object and purpose of the enactment of the legislation, namely, to eliminate the middleman, would be defeated. The Legislature therefore, provided in Section32-P that if the tenant expresses his unwillingness to become deemed purchaser of the land and the purchase consequently becomes ineffective, the Collector shall give a direction providing that the tenancy in respect of the land shall be terminated and the tenant summarily evicted. The land would then be surrendered to the landlord subject to the provisions of Section 15 and if the entire land or any portion thereof cannot be surrendered in accordance with the provisions of Section 15, the entire land or such portion thereof, as the case may be, shall be disposed of by sale according to the priority list. The priority list consists of persons who would personally cultivate the land and the sale of the land to them would ensure that the tiller of the soil becomes the owner of it and there is no intermediary or middleman to share the profits of his cultivation. Since the tenant is made the deemed c purchaser of the land in order to effectuate the policy of agrarian reform to eliminate the intermediary landlord and to establish direct relationship between the State and the tiller of the soil so that soils of his cultivation are not shared by an intermediary or middleman who does not put in any labour, the Legislature insisted that the tenant must personally cultivate the land of which he is made the deemed purchaser. The tenant, said the Legislature, would continue to remain owner of the land only so long as he personally cultivated it; he must make use of the land for the purpose of which it was given to him as owner. If the tenant failed to cultivate the land personally either by keeping it fallow or by putting it to non-agricultural use, he would lose the land under Section 328 and the land would be given away to others for personal cultivation in accordance with the provisions of Section 84-C."

17. As far as the right of the State to charge the premium is concerned the Division Bench observed as follows in paragraph 11 thereof:- "11. As the section stands there can be no doubt that it is implicit in the language used in the section that the payment contemplated is payment to the State Government. It must be remembered that the State is theoretically the owner of all land; all occupants hold under the State. If an occupant is not entitled to trnasfer his land without the permisson of the state, the state can very well say that the permission to transfer the land would be granted only if he pays a premium to the State as the sovereign owner of the land. As a matter of fact, such a provision is to be found in Section 73-B of the Bornbay Land Revenue Code, 1879. That section which was introduced in the Code with retrospective effect by Gujarat Act 35 of 1965 provides that where any occupancy, by virlue of any conditions annexed to the tenure by or under the Code is not transferable or parlible without the previous sanction of the State Government, the Collector GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] or any other officer authorised by the State Government, such sanction shall not be given except on payment to the State Government of such sum as the State Government may by general or special order determine. The Legislature has also similarly provided in Section 43 that if the tenant who is otherwise under an inhibition to transfer, wnats to transfer the land, he shall do so only on payment of such amount as the State Government may by general or special order determine. That is the charge which the State makes for permitting transfer where the occupancy is not transferable as of right. It is c no doubt true that the words "to the State Government" are not to be found after the word "payment" in Section 43 but that. does not make any difference. These words were perhaps not explicity used by the Legislature as the Legislature might have felt that even without these words the meaning of the section was reasonably clear …… "

18. The above decision has not been interfered with by this Court in any manner. A similar provision has been made in Bombay Paragana and Kulkarni Watans (Abolition) Act, 1950. Section 4 of this Act reads as follows:- 4. (1) A watan land resumed under the provisions of this Act shall {subject to the provisions of Section 4A] be regranted to the holder of the watan to which it apperlained, on payment of the occupancy price equal to twelve times of the amount of the full ass~ssment of F such land within [five years] from the date of the coming into force of this Act and the holder shall be deemed to be an occupant within the meaning of the Code in respect of such land and shall primarily be liable to pay land revenue to the State Government in accordance with the provisions of the Code and the rules made thereunder; all the provisions of the Code and rules relating to unalienated land shall, subject to the provisions of this Act, apply to the said land: c Provided that in respect of the watan land which has not been assigned towards the emoluments of the officiator, occupancy price equal to six times of the amount of the full assessment of such land shall be paid by the older of the land for its regrant: Provided further that if the holder fails to pay the occupancy price within the period of [five years] as provided in this section, he shall be deemed to be unauthorisedly occupying the land and shall be liable to be summarily ejected in accordance with the provisions of the Code. (2) The occupancy of the land regranted under sub- section (1) shall not be transferable or partible by metes and bounds without the previous sanction of the Collector and except on payment of such amount as the State Government may by general or special order determine. (3) Nothing in [sub-sections (1) and (2)] shall apply to any land- ( a) the commutation settlement in respect of which provides expressly that the land appertaining to the watan shall be alienable without the sanction of the State Government; or (b) which has been validly alienated with the sanction of the State Government under section 5 of the Watan Act. Explanation-For the purpose of this section the expression "holder" shall include- (i) all persons who on the appointed day are the watandars of the same watan to which the land appertained, and (ii) in the case of a watan the commutation settlement in respect of which permits the transfer of the land appertaining thereto, a person in whom the ownership of GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] such land for the time being vests. (emphasis supplied) 19. This Section 4 came up for consideration before a bench of three Judges of this Court in Nagesh Bisto Desai (supra), and in paragraph 43 this Court approved the scheme of the Section under which the transfer is subject to the sanction of the Collector, and on payment of requisite amount. This paragraph reads as follows:- 43. It still remains to ascertain the impact of Sub- section (2) of Section 4 of Act No. 60 of 1950 and Sub- section (3) of Section 7 of Act No. 22 of 1955, and the question is whether the occupancy of the land regranted under Sub-section (1) of Section 4 of the former Act and Sub-section (2) of Section 7 of the latter Act is still impressed with the character of being impartible property. All that these provisions lay down is that the occupancy of the land regranted under Sub-section (1) of Section 4 of the former Act shall not be transferable or partible by metes and bounds without the previous sanction of the Collector and except on payment of such amount as the State Government may, by general or special order, determine. It is quite plain upon the terms of these provisions that they impose restn'ctions in the matter of making alienations. On regrant of the land, the holder is deemed to be an occupant and therefore the holding changes its intrinsic character and becomes Ryotwari and is like any other property which is capable of being transferred or partitioned by metes and bounds subject, of course, to the sanction of the Collector and on payment of the requisite amount. 20. These two judgments answer the submission of the appellants that the amount which is being charged is not a tax but a fee. It is neither. It is a premium for granting the sanction. This is because under this welfare statute these lands have (2014) 3 S.C.R. A been permitted to be purchased by the tenants at a much lesser price. As held in Shashikant Mohan/a/ (supra), the tenant is supposed to cultivate the land personally. It is not to be used for non agricultural purpose. A benefit is acquired by the tenant under the scheme of the statute, and therefore, he must suffer B the restrictions which are also imposed under the same statute. The idea in insisting upon the premium is also to make such transfers to non-agricultural purpose unattractive. The intention of the statute is reflected in Section 43, and if that is the intention of the Legislature there is no reason why the Courts c should depart therefrom while interpreting the provision. 21. It was submitted by the dppellants that assuming that the valuation of the land is permitted to be done as per the Jantri rates, it must be so done on the basis of the rates as prevalent on the date of the application. The resultant injustice was D highlighted in the case of Savitaben in Civil Appeal No. 4129/ 2012. The fact however, remains that the Section speaks of previous s~mction. As noted earlier, Section 4(2) of the Bombay Paragana' and Kulkarni Watans (Abolition) Act, 1950 also speaks about the previous sanction. Thus, this is the theme E which runs through all such welfare agricultural enactments, and a similar provision in the said Act has been left undisturbed by the bench of three Judges of this Court. Therefore, the Jantri rate to be applied will be on the date of the sanction by the Collector, and not on the date of the application made by the F party. 22. Rule 25C of the Rules framed under the Bombay Tenancy and Agricultural Lands Act, '.1·948, was relied upon by the appellants. It speaks about the circumstances in which, and conditions subject to which sanction shall be given by the G Collector under Section 43 for transfer. The rule was relied upon by the appellants to submit that Government cannot charge any disproportionate amount under Section 43. The rule however, does not create any such restrictions on the provisions under Section 43. In .fact, the rule makes it clear that transfer of an H agricultural land for non-agricultural purpose is not easy. It is GOHIL JESANGBHAI RAYSANGBHAI & ORS. v. STATE OF GUJARAT & ANR. [H.L. GOKHALE, J.] only sub-clause, <e) thereof under which such a transferor will have to make ~ case which is when a transfer is sought for a bonafide purpose. Even so, this does not absolve one from . taking any prior sanction. It will only mean that if the application is bonafide, normally the transfer will be sanctioned, because as such there is no right to insist on a transfer for non-agricultural s purpose. 23. As far as the levy of the 80 per cent of the amount is concerned, it was submitted that it was unconscionable, and it would mean expropriation, and will be hit by Article 300A of the Constitution. Once we see the scheme of these provisions, in our view, no such submission can be entertained. In any case Mr. Nariman has pointed out that after the impugned judgment, the State Government has reduced the levy to 40 per cent which is obviously quite reasonable. 24. The last point which requires consideration is with respect to the period for considering the application, and granting the sanction. There is some merit in the submission of the appellants in this behalf. Such application cannot be kept pending indefinitely, and therefore we would expect the Collector to decide such applications as far as possible within 90 days from the receipt of the application, on the lines of the judgment of this Court in Pate{ Raghav Natha (supra). In the event the application is not being decided within 90 days, we expect the Collector to record the reasons why the decision is getting belated. 25. For the reasons stated above we do not find any reason to interfere in the impugned judgment rendered by the Division Bench, approving the decisions rendered by the Single Judges in the Writ Petitions. All appeals are, therefore, dismissed with no order as to costs. H.P. Appeals dismissed.