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S.C. Misra, C.J. and B.D. Singh, J.—This application has been preferred to this Court by the ex-intermediaries whose estate vested in the State of Bihar under the Bihar Land Reforms Act and relates to the settlement of the Mela known as the Khagra Mela, which used to be held on the bakasht and raiyati lands of the petitioners. The petitioners got their names registered u/s 7C of the Bihar Land Reforms Act with the Collector of Purnea and got settlement of the right to collect toll from the Mela from the year 1960 onwards on the basis of three years'' average of the previous Jama. When the question of settlement of the Mela for the year 1967-68 was taken up, the petitioners were served with a notice in Form P(2) for submission of sealed tender in Form T on the 20th of November, 1967. The petitioners submitted tender agreeing to pay the reserve Jama which was fixed at Rs. 75,150/-. It was accepted by the Deputy Collector Incharge Land Reforms, Kishanganj (opposite party no. 4) and duly confirmed by the Sub-divisional Officer, Kishanganj (opposite party no. 3). To their surprise, however, the petitioners received another communication from the Land Reforms Deputy Collector (opposite party no. 4) intimating that they were required to submit a fresh tender in Form T(i) agreeing to pay a reserved Jama of Rs. 1, 12, 725/-, failing which the Mela would be settled by public auction as required u/s 7C(2) of the Act. The intimation referred to the fact that the prices of commodities have gone up considerably of late and it was accordingly necessary that the amount payable as reserve Jama by the settlee of the Mela also must go up proportionately and, in any case, a rough enhancement by fifty percent of the amount payable would be proper in the circumstances. This application is directed against this subsequent demand made by the Land Reforms Deputy Collector. It has been conjectured that this demand is apparently in pursuance of a circular issued by the Government of Bihar in the Revenue Department being No. 110/67.7518 Bhumi Sudhar, dated the 27th September, 1967. The relevant portion of the circular has been quoted at page 7 of the petition and it runs thus:
Mr. J.C. Sinha appearing in support of the application has contended that the circular in question in so far as it affects the petitioners, in any case, must be held to be ultra vires of Rule 7-U of the Bihar Land Reforms Rules, which was inserted by Notification No. 1644-L.R. dated the 24th February, 1960. Clause (i) of the Rule stands thus:--
In respect of such hat, bazar or mela a reserve Jama shall be fixed by the Collector or the prescribed authority on the basis of the average of the Jama at which such hat bazar or mela was settled during the preceding three years. In case of improvement and developments in respect of the premises of such hat, bazar or mela or in the neighbourhood thereof, for which the outgoing intermediaries and/or their heirs are not responsible, and which are likely to increase the potentialities for yielding a higher Jama, such potentialities may also be taken into consideration and the reserve Jama can be suitably increased with the permission of the Commissioner.
It has been contended that the only event in which the Jama once fixed can be varied is in the case of improvements and developments as set out in this rule and that too can only be determined when there is increase of potentialities for yielding a higher jama, with the permission of the Commissioner. There is nothing on record to show that such permission was obtained. The matter was not at all submitted to the Commissioner, Bhagalpur Division, so as to fix the proportionate increase in the Jama resulting from any improvement as has been sought to be made out in the counter-affidavit filed on behalf of the State. The counter-affidavit, however, as well as the contention based on this counter-affidavit, as urged by the learned counsel for the petitioners, are both irrelevant inasmuch as the communication delivered to the petitioners on behalf of opposite party no. 4 does not refer to any improvement in the communication etc. of the Mela so as to justify the proportionate increase in the reserve Jama, but to the fact of rise in the prices of commodities which is the subject matter of the circular referred to above. The only question therefore, that calls for determination at this stage is whether the enhancement in the reserve Jama can be justified on the ground of rise in the prices of commodities. At one stage, we were inclined to accede to this contention on account of the general rise in the prices, but it appears that that is a cause which is patently unjustifiable in the circumstances in which the settlement of the Mela has been made to the petitioners and the terms on which the petitioners have agreed to pay the reserve Jama and undertook to realise the income accruing from the Mela under the various items. It has been contended that even assuming that there is increase in the prices of commodities, the increase in the reserve Jama, which has been directed to be made under the above circular of the Government of Bihar, cannot be justified because the petitioners in terms of the settlement made in their favour are not entitled to increase the rate of toll, but that amount must remain fixed as agreed upon between the petitioners and the State of Bihar. In fact, the sum of Rs. 75,150/-, approximately, was agreed to be paid when the terms on which the petitioners could realise the toll were fixed by the Government. There has been no variation in the amount which the petitioners would be entitled to realise from the holders of stall etc. in the Mela; and if they could not increase the rate at which toll would be payable by the holders of stalls etc., there could be no justification for the Government to increase the amount of reserve Jama. If there has been rise in the prices of commodities and if it could be followed in the corresponding rise in the rate of toll payable to the petitioners, there would be some justification, no doubt, for increasing the amount of reserve Jama as well. There is apparently a misconception on the part of the Government in issuing the above circular in broad terms, in any case, in so far as it applies to the case of the petitioners. The argument is well-grounded and must succeed.
Apart from the above, learned counsel has also raised another question which is to the effect that Rule 7-P, while providing for the manner in which the settlement of the Mela is to be made with the outgoing intermediary, contains a significant condition to be accepted by the intermediary before settlement of the Mela is made with him, which is "settlement will be made in the event of agreeing to forego compensation". Learned counsel has urged that the foregoing of compensation in respect of the area on which the hat, bazar or mela is held is a condition precedent, therefore, to qualify an intermediary to get the settlement of realising toll from the Mela concerned. In the present case, the petitioners accepted the condition, agreed to forego the compensation and actually got settlement of the Mela from 1960 onwards. It may be stated, however, that the duration of this right of the intermediary is to last only for fifteen years at the longest. During these fifteen years, however, since the petitioners have obtained settlement on this condition, it is obvious that if they do not agree to pay the reserve Jama, they cannot be granted settlement of the Mela in future years. This, however, will not entitle them to revive their claim for compensation in respect of this area. If they had known the position in the year 1960, when they agreed to forego the right of compensation in respect of this area, that the Jama was liable to be enhanced in future, more so, if such enhancement would be made even without a corresponding condition in their favour to increase the rate of toll from the stall-holders and others, it is likely that they might not have agreed to go in for the deal at all. They might have found it more advantageous to claim their compensation and not to take settlement of the Mela. As a matter of fact, in pursuance of Rules 7-P and 7-U, when reserve Jama was fixed in response to the notice of the intermediary and the petitioners agreed to execute the necessary agreement in Form P(3) agreeing to forego the compensation, the contract between the parties was completed once for all. Any question of enhancement in the reserve Jama can only legitimately arise if there is an improvement in the Mela site as contemplated in Rule 7-U or if there is a variation in the contract in the sense that Government would be prepared to allow the petitioners to realise toll at a higher rate from the stall holders, in view of the general rise in the prices of commodities. In no other contingency it would be open to Government to alter the reserve Jama once fixed. This approach of learned counsel also must be accepted to be sound and unanswerable in law, From this point of view also, the Government Circular referred to above and the communication made by opposite party No. 4 to the petitioners must be held to be illegal and fit to be struck down as such.
The application must accordingly succeed and it must be held that the Government order in so far as it applies to the petitioners for increasing the reserve Jama at fifty percent cannot be given effect to and the petitioners must be held to be entitled to get the settlement of the right to collect toll of the Mela on the terms and conditions at which the agreement between the parties was made in the year 1960. To say, however, that the increase in the reserve Jama cannot be made in terms of circular referred to above is not to say that Government cannot increase the Jama as contemplated in Rule 7-U which came into existence on the 24th of January, 1960, prior to the execution of the agreement itself by the petitioners in favour of the State of Bihar. As a matter of fact, when the counter-affidavit was filed on behalf of the State of Bihar relating to improvement in the Mela site, and as is how urged, as a legitimate ground for increase in the reserve Jama that is no doubt, a reasonable and legal approach and, if Government is satisfied that there is improvement in the Mela site as has been given out in the counter-affidavit, it is open to Government to start a proceeding for determination of the amount by which the reserve Jama may be increased with the permission of the Commissioner, Bhagalpur Division, as laid down in Rule 7-U of the Bihar Land Reforms Rules.