Case BriefsSupreme Court

Supreme Court: The 3-judge bench of UU Lalit, Indu Malhotra and AS Bopanna, JJ has held that an agriculturist cannot part with his agricultural land to a non-agriculturist though a ‘Will’ as per Sections 43 and 63 of the Bombay Tenancy and Agricultural Lands, Act, 1948 (the Tenancy Act).

Section 43 lays down the restrictions on transfer of land sold or purchased under the Tenancy Act and Section 63 bars the transfer of agricultural lands to non-agriculturists.

The Court said,

“if it is held that the testamentary disposition would not get covered by the provisions of Section 43, a gullible person can be made to execute a testament in favour of a person who may not fulfil the requirements and be eligible to be a transferee in accordance with law. This may not only render the natural heirs of the tenant without any support or sustenance but may also have serious impact on agricultural operations.”

Explaining the scheme of the Act and the provisions in question, the Court said that the primary concern of provisions referred to in Section 43 of the Tenancy Act is to see that the legislative scheme of granting protection to persons from disadvantaged categories and conferring the right of purchase upon them, and thereby ensure direct relationship of a tiller with the land.

If a tenant or any other person from the priority list is conferred ownership in respect of the agricultural land or when a landlord is allowed to retain the land which was surrendered by his tenant, each one of them is obliged to cultivate the land personally. In case any of them is unwilling, the land must be given to those who principally depend upon agricultural operations for their sustenance. If a person is a beneficiary of such statutory purchase and wishes to transfer his holding the law obliges that he must take prior sanction from the Collector.

The Court, further,explained that a transfer inter vivos would normally be for consideration where the transferor may get value for the land but the legislation requires previous sanction of the concerned authority so that the transferee can step into the shoes of the transferor, and carry out all the obligations as a part of legislative scheme must be discharged. Thus, the screening whether a transferee is eligible or not, can be undertaken even before the actual transfer is effected. Hence,

“if a testamentary disposition which does not have the element of consideration is to be permitted, and if it is assumed that Sections 43 and 63 of the Act do not get attracted, the land can be bequeathed to a total stranger and a non-agriculturist who may not cultivate the land himself; which in turn may then lead to engagement of somebody as a tenant on the land. The legislative intent to do away with absentee landlordism and to protect the cultivating tenants, and to establish direct relationship between the cultivator and the land would then be rendered otiose.”

The Court concluded by saying that the provisions, though lay down a norm which may not be fully consistent with the principles of Indian Succession Act, are principally designed to attain and sub-serve the purpose of protecting the holdings in the hands of disadvantaged categories. The prohibition against transfers of holding without the previous sanction of the concerned authorities, is to be seen in that light as furthering the cause of legislation.

[Vinodchandra Sakarlal Kapadia v. State of Gujarat, 2020 SCC OnLine SC 545 , decided on 15.06.2020]

Case BriefsHigh Courts

Madhya Pradesh High Court: This writ was filed before a Single Judge Bench of Sheel Nagu, J., in nature of mandamus. 

The grievance of petitioner was that their names were removed from the revenue record of certain agricultural lands which they claimed to be belonging to them by virtue of the operation of law. Petitioner contended that by virtue of The Kanoon Maal Gwalior, Samvat 1983, The United State of Gwalior, Indore & Malwa (Madhya Bharat) Revenue Administration & Ryotwari Land Revenue & Tenancy Act, Samvat 2007 and Madhya Bharat Zamindari Abolition Act, Samvat, 2008, the land belonged to them and they were Bhumiswami of the same. 

High Court viewed that claims of the petitioner had already been raised before the competent court under MPLRC and the revenue Court of SDO which is seized of the matter. Thus, the Court was of the view that it should not exercise its extraordinary writ jurisdiction as the same was filed without any grounds. Therefore, this petition was dismissed. [Bachchu  Singh v. State of M.P.,2018 SCC OnLine MP 919, decided on 13-12-2018]

Case BriefsHigh Courts

Allahabad High Court: A Single Judge Bench comprising of Siddhartha Varma, J., allowed a writ petition which was in respect to Section 82 of the U.P. Revenue Code, 2006.

Facts of the case are that petitioner’s agricultural land was declared as non-agricultural. Aggrieved by the same, petitioner filed an application under Section 82 of the Code for cancellation of the above declaration. The aforementioned application was dismissed stating that by canceling the declaration, petitioner was trying to save stamp duty. Later, a revision petition filed by petitioner on the dismissal of above application was also dismissed and for the same, this writ petition was filed.

It was submitted by the petitioner that in accordance with Khasras in the revenue records for the land, agricultural work was going on and prayed for the withdrawal of declaration. It was found on a spot inspection conducted by Revenue Inspector that the plot was vacant and no agricultural work was being done. While responding to the above inspection data, petitioner contended that just because a plot is vacant does not necessarily imply that it is being used for other purposes than agricultural. Whereas the respondent alleged that petitioner was trying to sell the plot and save stamp duty by declaring it as an agricultural land.

The High Court after hearing both the parties quashed the order passed by Additional Commissioner and Sub-divisional Magistrate, Sadar stating that just because a land is vacant, it cannot be concluded that it can never be used for agricultural purposes unless a building is constructed to stop the agricultural scope of the plot. [Sunita Agarwal v. State of U.P., 2018 SCC OnLine All 1326, order dated 11-09-2018]

Case BriefsHigh Courts

Kerala High Court: A 2-Judge Bench comprising of K.Vinod Chandran and Ashok Menon, JJ. dealt with an appeal against the order of Income Tax Appellate Tribunal, where order of first appellate authority was affirmed. It was found that sale of assessee’s land comes under exception of capital gains under Section 45 of the Income Tax Act, 1961 and hence was not taxable.

Assessee is alleged with not declaring capital gain in the income return filed when he sold his property to the owners of a newspaper. Assessee contended that the land in question is an agricultural land and thus is not taxable. Assessee only showed a certificate issued by Village Officer as an evidence to show land as agricultural. Court found that this certificate could not have been relied on as it was issued after sale. Assessee submitted that under Section 2(14) of the Act according to which only those land come under the category of capital asset which comes under (a), (b) of clause (iii).

The High Court stated that merely the fact that land does not come under above provision does not exclude property from the definition of capital asset. High Court viewed that assessee had failed to show that the land in question was an agricultural land thus sale of this land would be taxable under the Act. Therefore, orders of first appellate authority and the Tribunal were set aside. [Principal Commissioner of Income Tax v. Kalathingal Faizal Rahman, 2018 SCC OnLine Ker 3239, decided on 02-07-2018]