Case BriefsSupreme Court

Supreme Court: The 3-judge bench of SK Kaul, Aniruddha Bose and Krishna Murari, JJ has held that under the West Bengal Restoration of Alienated Land Act, 1973, homestead land, when included within the meaning of the term ‘land’ means homestead of the agriculturist and not any or every structure of non­-agricultural land. The said view was expressed by Calcutta High Court in Prosad Kumar Dhara v. Kamala Kanta Dikshit, 1982 SCC OnLine Cal 82 and approving the same, the Court said,

“This proposition has been laid down on interpretation of a State Law by the jurisdictional High Court. The said judgment has held the field since 1982.”

The Court, further, held that even waterbodies like pond or tank should also have some connection with agricultural land or the occupation of the transferor as agriculturist to come within the purview of the 1973 Act.

Scheme of the West Bengal Restoration of Alienated Land Act, 1973

The West Bengal Restoration of Alienated Land Act, 1973 contemplates, in substance, return of land to a small landholder in a situation such a landholder conveys the same to raise funds to tide over financially distressed condition. For restoration of the conveyed land, the concerned landholder is required to make an application to the authority prescribed under the said statute. This legislation lays down certain parameters within which a landholder ought to come to invoke the provisions relating to restoration of the land already conveyed by him.

The nature of land to which the said Act applies is defined in Section 2 (2) of 1973 Act. Under the said provision, land means agricultural land and includes homestead, tank, well and water channel. To be eligible for the protective umbrella of this statute, the aggregate holding of the transferor cannot exceed two hectares. The 1973 Act, as originally framed, applied to any transfer made by a landholder “in distress” or “in need of money for the maintenance of himself and his family” or “for meeting the cost of his cultivation”. There has been subsequent amendment to the Act by which the words “in distress or” has been omitted.

Background of the Case

A deed of conveyance executed on April 26, 1968 and the transferors of the land forming subject-matter of that deed applied for restoration thereof on August 9, 1974. At that point of time, the 1973 Act, as originally framed was applicable. The land forming the subject of the sale transaction included parts of a pond (tank) and garden. It was urged that the subject land was sold in distress. The deed of conveyance showed that the first vendor was effecting transfer for buying other property whereas the second vendor wanted the sale proceeds to be applied for repaying loan obtained for marriage of her sister. The third vendor, also representing her two minor sons and daughter, declared in the deed that the sale was being effected for meeting the educational costs of her two minor sons and also for repaying loans obtained for (i) marriage of her daughter (ii) obtained by her husband and (iii) for buying “some paddy land for our food, cash is required”. The purchaser of the land argued that the land in question was homestead non­agricultural land and hence the said Act would not be applicable so far as the subject­transaction was concerned.

Calcutta High Court’s judgment in Prosad Kumar Dhara v. Kamala Kanta Dikshit, 1982 SCC OnLine Cal 82

The High Court held that the 1973 Act did not profess to reopen all transfers of all properties and it was intended to give relief to agriculturists in respect of distress sales or the likes and in the definition clause land has been defined to be limited to agricultural land. Referring to homestead land, the Division Bench took the view that homestead land when included within the meaning of the term “land” in 1973 Act means homestead of an agriculturist and not any and every structure on non-agricultural land. [Read the full text of the judgment here]

Supreme Court’s Ruling

Bose, J, for himself and Kaul and Murari, JJ, said that mere fact that part of the sale proceeds has been utilised for purchasing  another agricultural land would not per se disentitle a transferor from invoking the restoration provision contained in the 1973 Act, provided of course, the transaction sought to be repudiated otherwise attracts the provisions of the said statute.

Under Section 4 (1)(a) of the Act three situations have been contemplated as alternative conditions to enable a land holder to seek restoration of land already conveyed by him. These are “in distress” or “in need of money for the maintenance of himself and his family” or “for meeting the cost of his cultivation”. The Court noticed that these are interconnected situations and in the case at hand, the vendors’ reasons for transfer, spelt out in the conveyance deed itself comes within the broad terms expressed in the statute.

The Court said that the substantial part of the sale proceeds was to be applied to meet the maintenance need of the vendors and their family. Fresh purchase of land, covering little over half of the consideration sum received from sale of the subject¬land was also for the purpose of maintaining the necessities of the vendors. Hence, it cannot be held the said transaction per se did not constitute distress sale. The reasons cited by the vendors for selling the land definitely show that they were in need of money.

However, on a reading of the orders of the Special Officer, Appellate Authority, and the Tribunal, the Court found that the issue relating to the character of the land conveyed was not raised before any of these three fora. It noticed,

“… this question goes to the root of the matter in controversy. But because of this lacuna, we do not think the applicants ought to have been altogether nonsuited from the restoration proceeding, particularly since this point does not appear to have had been raised before the statutory fora by the original purchaser. There is no reflection of such argument in the said three orders. In our opinion, this is a crucial point which should have been determined before foreclosing the applicants’ restoration plea.”

It, hence, remanded the matter to the Tribunal with a direction to undertake the exercise of determining the nature of the land with the object of finding out if the same came within the purview of the 1973 Act or not. The Court directed the Tribunal to complete the process of adjudication on this point within a period of four months.

[Renuka Dey v. Naresh Chandra Gope,  2020 SCC OnLine SC 895, decided on 02.11.2020]

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]

Patna High Court
Case BriefsHigh Courts

Patna High Court: A Division Bench set aside an order by a Single Judge of the same Court which allowed pre-emptive rights to co-sharers in a property. The appellant purchased a small piece of land from one of the respondents, who since died and was represented by his legal heirs. Other respondents who are all descendants of a common ancestor, claiming to be boundary raiyats and co-sharers in the property filed before the Deputy Collector Land Reform (“DCLR”) for pre-emption, who allowed the application under Section 16(3) of the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act, 1961 (“the Act”), which reads:

“When any transfer of land is made after the commencement of the Act to any person other than a co-sharer or a raiyat of adjoining land, any co-sharer of the transferor or any raiyat holding land adjoining the land transferred, shall be entitled, within three months of the date of registration of the document, of transfer, to make an application before the Collector in the prescribed manner for the transfer of the land to him on the terms and conditions contained in the said deed:

Provided that no such application shall be entertained by the Collector unless the purchase money together with a sum equal to ten percent thereof is deposited in the prescribed manner within the said period.”

This decision was challenged before the Additional Collector of Saran, Chapra, the Additional Member of the Board of Revenue, Bihar and a Single Judge Bench of the Patna High Court, all of whom upheld the pre-emption.

The respondents maintained the position that since the land was agricultural land, they were entitled to pre-emption under the Act and the said land be transferred to them at the rate paid by the appellant-transferee.

The appellant contended that though the land was listed in public records as agricultural and ‘sinchit’ (irrigated), it had changed its nature over the years and that pucca houses had been built on the said piece of land and also on adjoining land, making it a residential property and hence not under the purview of Section 16(3) of the Act. This factum of permanent construction on the land in question and surrounding land was observed and reported by the amin (local official) sent to inspect the land by the DCLR but the DCLR had ruled against the appellant only because the land was originally listed as agricultural.

The Court observed that the Act was made to facilitate cultivation of larger tracts of land and to offset the fragmentation of land caused by partition within families to facilitate better cultivation. Since the evidence was presented to show that the land was now being used as a residential tract and further that the piece of land under dispute was too small to sustain cultivation, no right of pre-emption would exist for co-shareres and boundary raiyats under the Act. Hence the judgment by the lower forums was set aside, and the appeal was allowed. [Kalika Prasad Rai v. State of Bihar, 2018 SCC OnLine Pat 813, decided on 17-05-2018]