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Judgment
K. Subba Rao, C.J.—The three writs relate to the leasehold inte(sic) of the petitioner in state quarries in tenses in the erstwhile estate or the Rajah of catagiri abolished under the Madras Es(sic) (Abolition and Conversion into Ryotwari) Act XXVI of 1948, (hereinafter referred to the Act).
There are rich slate quarries in the (sic)es of Rayavaram, Ganugupenta, Potula(sic) Goguladinne, Tummalacheruvu, Chenna(sic) palli, Talapedu, Gollapalli, Rolagumpadu Mirzapet in Padli Taluk and Kocharlakota (sic)rsi taluk, Nellore District. The said vil(sic) formed part of the Venkatagiri estate. The of Venkatagiri got the entire area pros(sic)d through expert geologists and opened (sic)veral quarries in the said area. On 10-1-1942 it is alleged that he entered in agreements with one B. Nageswararao (sic) working of the quarries. Under the of the agreement, the Rajah agreed to (sic) the said Nageswara Rao five successive (sic) leases afterwhich the said Nageswara would be entitled to obtain a lease for a period of 20 years commencing from the termination of the fifth year. Pursuant to the terms of the agreement it is said that five yearly leases were given in favour of the said Nageswararao in respect of Rayavaram village.
The term of the last lease expired on 30-11-1947. On the expiry of the last lease, another temporary lease was given in favour of Nageswara Rao for the period from 1-12-1947, to 30-11-1948. On 10-12-1947 the petitioner obtained a transfer of the rights of the said Nageswara Rao under the alleged agreement dated 10-1-1942 for a consideration of Rs. 6,000/- and obtained a formal lease from the Rajah of Venkatagiri on the same day in respect of the aforesaid villages.
Under the said lease, it was provided that the petitioner should pay an annual sum of Rs. 12,000/- to the lessor and work the quarries for 20 years ending with 19-12-1967 and had also to pay a dead rent of Re. 1/- per acre. The Venkatagiri estate was notified under the Act and was taken over by the Government on 7-9-1949. On the same day, the petitioner presented an application to the District Collector, Nellore, requesting the Government to confirm the transaction dated 10-1-1942 and to permit him to continue to work the quarries on the terms and conditions of the said agreement and the petitioner was permitted to carry on quarrying operations.
But on 12-2-1952 he received a communication for the Board of Revenue stating that the stipulation in the agreement dated 10-1-1942 to grant a further lease for 20 years on the expiration of the first 5 years was but a mere prospect of obtaining a lease subject to the fulfilment of some future conditions that the said agreement could not be treated as a creation of a right in land contemplated by S. 20(1) of the Act, that the agreement dated 10-1-1942 not being registered could not affect any interest in land, that the lessee''s right must be deemed to have been created on the date of the lease deed, namely, 10-12-1947 and was, therefore, not enforceable against the Government.
The petitioner sent a reply to the said notice asserting the validity of the agreement dated 10-1-1942 and repudiated the interpretation put upon S. 20 by the Government. As the Government, ignoring the said representations gave instructions to the Manager of the Venkatagiri Estate asking him to take over possession of the said quarries, he filed W.P. No. 287 of 1952 on the file of the High Court, Madras, for the issue of a writ of Mandamus directing the State to forbear from terminating the leasehold right of the petitioner in the slate quarries and from interfering with his possession and working of the slate quarries.
That petition came up for hearing before Umamaheswaram J. In the counter filed, for the first time, the Governments alleged that the agreement dated 10-1-1942 executed by the Rajah of Venkatagiri in favour of B. Nageswara Rao and the subsequent annual leases executed in pursuance of the said agreement were not real or bona fide transactions. As the said allegation was made by the Government for the first time in the counter affidavit, Umamaheswaram J. directed the Govt. to hold an enquiry into the truth of the agreement dated 10-1-1942 and of the leases and pass final orders within three months from the date of his order dated 18-7-1955.
Thereafter, the Government instructed the Board of Revenue to hold an enquiry and submit report in the matters within the time prescribed. The Board instructed the Director of Settlements to make an enquiry. The petitioner produced his witnesses and documents before him and his advocate argued on the basis of the material produced before him. The Director of Settlements submitted a. report to the Board of Revenue.
The Board of Revenue, after calling for the records from the Collector and the Estate Manager and the records of the enquiry conducted by the Director of Settlements, submitted a report to the Government on 20-10-1955. The Government, after considering the Board''s report instructed the Board of Revenue to dispose of the case on the merits in view of the delegation of powers conferred on the Board under the second proviso to S. 20 (1) of the Act.
Thereafter, the Board of Revenue passed an order dated 27-12-55 holding that the lease to the petitioner was granted only subsequent to 1st July, 1945 and that, as the lease was for a period exceeding one year, it was not enforceable against the Government according to the second proviso to S. 20 (1) of the Act. On that finding, the Board declined to ratify the lease and terminated it under the powers delegated to it under the second proviso to S. 20(1). They also directed the Collector to take possession of the quarries from the petitioner.
Writ Petition No. 1 of 1956 is filed for the issue of a writ of mandamus directing the Andhra State to forbear from terminating the leasehold right of the petitioner in the state quarries. Writ Petition No. 19 of 1957 is one for the issue of a writ of certiorari to quash the order of the Board of Revenue. Writ Petition No. 470 of 1957, is filed for quashing the order passed by the Board of Revenue or in the alternative, for the issue of a writ of mandamus directing the State of Andhra Pradesh to issue a fresh lease in accordance with R. 47(sic) of the Mineral Concession Rules 1949.
Mr. Vedantachari, learned counsel for the petitioner raised various contentions in support of the three writs and we shall proceed to consider them seriatim.
The first contention is that the enquiry under S. 20 (1) of the Act is judicial or quasi-judicial in nature and therefore the Board of Revenue should have made the enquiry itself and it had no jurisdiction to delegate it to a subordinate officer i.e. the Director of Settlements. The enquiry was held either under the provisions of the Act or in pursuance of the directions given by Umamaheswaram, J. and in either view, the argument proceeds the enquiry should have been held by the Revenue Board and not by its Subordinate Officer.
It is not disputed that if a statute confe(sic) a judicial power on a tribunal it cannot delega(sic) it to another body. It is, therefore, necessary to consider the nature and the scope of the enquiry in respect of the termination of leas provided by the statute. The relevant provisions of the Act read thus:
Section 20: 1. In cases not governed (sic) by Ss. 18 and 19, where before the notification date, a landholder has created any right any land (whether by way of lease or otherwise) including rights in any forest, mines minerals, quarries, fisheries or ferries, the section shall be deemed to be valid; and rights and obligations arising thereunder, or after the notified date, shall be enforceable by or against the Government:
Provided that the transaction was void or illegal under any law in force at time:
Provided further any such right area on or after 1st day of July 1945 shall not enforceable against the Government, unless was created for a period not exceeding year;
Provided also that where such right created for a period exceeding one year, un(sic) it relates to the private land of the landho(sic) within the meaning of S. 3, Cl. 10 of Estates Land Act, the Government may, if their opinion, it is in the public interest to so, by notice given to the person concer terminate the right with effect from such as may be specified in the notice, not be earlier than three months from the date they.
The person, whose right has been miniated by the Government under the going proviso shall be entitled to compens(sic) from the Government which shall be determined by the Board of Revenue in such ma(sic) as may be prescribed, having regard to value of the right and the unexpired portion the period for which the right was are. The decision of the Board of Revenue shall final and not be liable to be questioned in Court of law.
The Government made an order dated 22 prescribing the authority to make an en(sic) under S. 20 (1). The said Government (sic) reads :
In the case of any right in any created by the landholder on or before is of July, 1945, for a period exceeding one and falling under the second proviso to (1) of the said Act, the authority to (sic) whether the right should be terminate allowed to continue shall be the Board of Revenue. Any order passed by the Board Revenue under this rule shall be subject revision by the Government.
The main section says that all in any land created by a landholder are(sic) The second proviso to that section state any such right created after 1st July shall not be enforceable against the Court (sic)ent. The section does not provide a judicial (sic) quasi-judicial machinery for making an enquiry to ascertain whether a particular right is created by a landholder before 1st July 1945 (sic) subsequent to 1st July 1945. The provisory declares that certain legal consequences (sic)w on the basis of certain facts and presumably the Government will have to tentatively decide those facts to exercise the rights cornered on them under the said section. If (sic)se facts do not exist or are wrongly decided by the Government to exist the party affect-could certainly question the action of the Government in a civil Court. The Government enviously could not decide the jurisdictional is wrongly and purport to deprive the landlord (sic)der of the rights under the section. The Government for the purpose of implementing the provisions of the Act, by their order dated 22-5-1951, empowered the Revenue Board to decide ether the rights of the landholder falling (sic)der the second proviso should be terminated allowed to continue. This is nothing more (sic) an administrative enquiry held for the pose of implementing the provisions of 20 of the Act. If so it follows that the Government or the Revenue Board would cer(sic)ly be acting within their rights, if they (sic)ered material for ascertaining the neces(sic) facts either directly or through their sub(sic)inates. The Government authorised the Revenue Board to make an enquiry and the Revenue Board made the order on the basis the material supplied to it by the Director Settlements and also on other material. In absence of a statutory requirement of a (sic)cial or quasi-judicial enquiry, we must hold the order of the Revenue Board was ad(sic)strative in nature and the fact that the (sic)ctor of Settlement made an enquiry simu(sic)g that of a judicial enquiry would not make any the less an administrative enquiry.
In this context two decisions of the Supreme Court may usefully be referred to (sic) first is that of Pradyat Kumar v. The (sic)ble. The Chief Justice of Calcutta, (S) 1956 SC 285 (A). There, the Chief (sic)ce of the Calcutta High Court got an en(sic) made by a Judge of that High Court and he basis of that enquiry, dismissed the (sic)trar of that Court. It was contended that enquiry being judicial in nature, the Chief (sic)e could not depute another to make the (sic)ry but should have done it personally. (sic)ting to this argument Jagannadha Das, J. delivered the judgment on behalf of the (sic) made the following observations it 291:
As pointed out in Barnard v. National Labour Board, 1953-2 Q.B. 18 (A-1) at page (sic)t is true that "no judicial tribunal can (sic)ate its functions unless it is enabled to do pressly or by necessary implication". But (sic)ercise of the power to appoint or dismiss (sic)icer is the exercise not or a judicial power (sic) an administrative power. It is none the (sic), by reason of the fact that an opportu(sic) show cause and an enquiry simulating judicial standards have to precede the exercise thereof.
It is well recognised that a statutory functionary exercising such a power cannot be said to have delegated his functions merely by deputing a responsible and competent official to enquire and report. That is the ordinary mode of exercise of any administrative power. What cannot be delegated except where the law specifically as provides is the ultimate responsibility for the exercise of such power.
Here as there the Revenue Board was only exercising administrative power. It was well within its rights in deputing the Director of Settlements to enquire and report.
In the context of an enquiry made by the Regional Transport Authority, the Supreme Court in New Prakash Transport Co. Ltd. Vs. New Suwarna Transport Co. Ltd., observed at p. 246 (of SCJ) : (at p. 241 of AIR) thus:
This case therefore, is an authority for the proposition that simply because property rights are involved, the authorities charged with the duty of deciding claims to such rights are not necessarily apart from the provisions of the statute; required to function as quasi-judicial tribunals.
By the same parity of reasoning, though the order of the Revenue Board provisionally affects the rights of the petitioner, it must be held that it merely acted administratively.
The decision of the High Court, Hyderabad in Ali Mohammad v. Mohammad Abdul Gani, ILR (1952) Hyd 525: (AIR 1952 Hyd 146) (C), does not lay down any different proposition. There, the Additional Collector made an enquiry but the actual order was made by the Collector. The learned Judges held that such a procedure was right and observed at p. 525 (of ILR): (at p. 147 of AIR).:
Such a procedure may probably be prevalent and in force on the executive or the administrative side but not at any rate on the judicial side.
The facts are not clear from the judgment. But the order quashed was obviously one made by the Collector in a judicial enquiry. We therefore hold that the order of the Revenue Board was not vitiated by the fact that it based its order partly on an enquiry made by the Director of Settlements.
It is then said that the Government did not comply with the terms of the order of Umamaheswaram J. and therefore the enquiry held by the Director of Settlements was void. Umamaheswaram, J. directed the Government to hold an enquiry under S. 20 to decide whether the lease was granted prior or subsequent to 1-7-1945 and to pass appropriate orders within three months from the date of the order.
The learned counsel contends that the Government did not comply with any one of the terms of the order for the following reasons : (1) The Government did not make the order; (2) The Government did not make the enquiry; (3) The Revenue Board which was authorised by the Government to make an enquiry under S. 20 did not make the enquiry but the Director of Settlements did it and (4) the order was not made within three months prescribed. Umamaheswaram, J. directed the Government to hold an enquiry under S. 20 and to decide whether the lease was granted prior or subsequent to 1st July 1945.
The mode of enquiry was prescribed by G.O. Ms. No. 1250 Revenue dated 22-5-1951, whereunder the Government authorised the Revenue Board to decide the dispute under the second proviso to S. 20 (1) of the Act and reserved to itself the power to revise the order of the Revenue Board. It may be presumed therefore that the learned Judge as well as the learned advocates appearing for the parties were aware of the said order at the time when Umamaheswaram, J. made his order:
It is therefore reasonable to assume that when Umamaheswaram, J. directed the Government to make an enquiry under S. 20 the learned Judge meant that the enquiry should be in the manner prescribed by the said Government Order. Under the Government''s Order, the enquiry should be made by the Board of Revenue and the Order of the Board of Revenue would be subject to revision by the Government. The petitioner, instead of filing a revision against the Order of the Revenue Board, filed a writ petition and thus prevented the Government from making a final order. It is still open to the petitioner if he is so advised to move the Government to revise the order of the Revenue Board.
Nor are there any merits in the contention that the Revenue Board did not make an enquiry directly. We have already indicated in a different context that the Revenue Board was sitting in an administrative capacity and that it was well within its rights in gathering the necessary material by directing its subordinate to make the enquiry. That apart the petitioner appeared before the Director of Settlements by an advocate, adduced evidence filed documents, argued on the merits and invited the decision of the Director of Settlements. Having submitted to the jurisdiction of the Director of Settlements, he is certainly precluded from questioning his jurisdiction. See O.A.O.K. Latchmanan Chettiar Vs. The Commissioner, Corporation of Madras and Another,
We also find it difficult to accept the argument that the Revenue Board had no jurisdiction to make an order beyond three months from the date of the order of Umamaheswaram, J. Neither S. 28 of the Act nor the order of the Government prescribing the mode of enquiry under S. 20 (1) second proviso, prescribe any period of limitation for making an enquiry. Umamaheswaram, J. therefore could not have prescribed any period of limitation for the making of an order by the Government. What the learned Judge obviously meant was that the Government should make the order within a reasonable time which he fixed at three months. For one reason or other the Revenue Board was not able to complete the enquiry within the prescribed time and indeed the Government filed C. M. P. No. 47(sic) of 1956 in the Court for extension of time and Umamah swaram. J. said on that petition that no order were necessary. In the circumstances, it cannot be said that the order made after the (sic)piry of three months given by the learned Judge was without jurisdiction.
The next contention of the learned counsel is that the order of the Andhra Board of Revenue is vitiated by the following err(sic) apparent on the face of the record. (1) reference was made by the Board to Ex. A the list of documents filed before the Income tax Officer; (2) There was no reference the other evidence; (3) The Board overlook the fact that the provisions for mines was produced in the bill only in February, 1948.
The Revenue Board had considered entire material placed before it and had (sic) to the conclusion which it did. The mere that some pieces of evidence have been of entered or some circumstances have not been verted to by the Board cannot be said to an error apparent on the face of the re(sic) within the meaning of decided cases. In view, W.P. No. 1 of 1956 is misconsider. The proper course for the petitioner is to a civil suit wherein the question of fact ra(sic) may appropriately and satisfactorily be deci(sic).
The learned counsel then cont(sic) that, even if the lease was executed after July, 1945, the Government have no power terminate the lease without paying compensation under the Act. This argument to upon the terms of S. 20, which we have tracted above. Learned counsel for the petitioner contends that the third proviso ap(sic) to leases for periods exceeding one year (sic)cuted after 1st July, 1945, while the Advocate General contends that the said proviso ca(sic) invoked only in the case of leases exe(sic) prior to 1st July, 1945.
To appreciate the rival contentions, necessary to analyse the provisions of the (sic)tion. Sub-section (1) is wide and gener(sic) terms and it says that any transaction was under a landholder has created any rig any land is deemed to be valid and all and obligations arising thereunder would enforceable by or against the Government the provisos are excluded, under this is a lease of a mine in an estate, whether executed before or after 1st July, 1945, is
The first proviso need not be consider as it is common case that the transaction not void and illegal at the time it was (sic)cuted. The second proviso prohibits er(sic) ability against the Government of any right created on or after 1st July, 194(sic) saves from the operation of that proviso for periods not exceeding one year. The proviso provides for the termination of (sic) created for a period exceeding one year Government if, in their opinion, it is in(sic) interests to do so. Sub-section 2 pre machinery for paying compensation in respect of the right so terminated. The question whether the third proviso is a proviso to the second proviso or to the main section.
Learned counsel for the petitioner, intends that, under the rules of statutory construction, every word in the section should be (sic)ven a meaning, that, under S. 20 (1), both (sic)ghts and obligations would be enforceable by against the Government whereas under the (sic)cond proviso only the right created on or (sic)er 1st July, 1945 shall not be enforceable (sic)ainst the Government and, therefore, the (sic)ht is not extinguished though it is not enceable against the Government.
In other words, his contention is that, while (sic)der the main section all rights and obligate arising under the transaction are traceable by the Government as well as (sic)nst the Government, under the second pro(sic), only the right is not enforceable against Government. The argument proceeds that, (sic)h under the main section and under the end proviso, the transaction is valid and (sic)t though under the main section, the rights (sic) obligations thereunder are mutually enceable, under the proviso the Government enforce them but the other party can only (sic)k out his rights in a manner otherwise than specific performance and, therefore, in either (sic) the right subsists till terminated as provided by the third proviso.
The main section says that every transaction whereunder a right in any land was creat(sic) by the landholder shall be deemed to be (sic)d. The second limb of the sub-section only (sic)hasises the consequences of such validity, (sic)ely, that the rights and obligations u/s are enforceable by or against the (sic)ernment. Under the second proviso, a (sic)t created for a period exceeding one year enforceable against the Government. While the main section makes every tran(sic) on mutually enforceable, the proviso (sic)es it only unenforceable against the Government.
Under S. 2 (i) of the Indian Con(sic) Act, an agreement which is enforceable law at the option of one or more of the (sic)es thereto but not at the option of the (sic) is a voidable contract. On the same (sic)ple, as the transaction covered by the and proviso is enforceable by one of the (sic)es to it, that is, the Government and not (sic)ceable by the other, it is voidable at the (sic)ce of the Government.
The Government can either affirm it or firm it. This interpretation gives full (sic) to the different phraseology used in the (sic)d wing of the main section and that in the (sic)d proviso. The third proviso refers to a right which could only mean the right (sic)oned in the main section. The exclusion the private land of a land-holder from the (sic)tion of the third proviso is also indicative (sic) fact that it is not a proviso to the second (sic)o as the second proviso takes in private of the landholder and does not lay down limitation on the ground of public interests.
Sub-section (2) provides only the machinery for giving compensation to the right terminated under the third proviso. The scheme of S. 20 is, therefore, apparent. All rights created by a landholder before the Act are valid, but rights created for a period over one year can be terminated by the Government in public interests after paying compensation, and transactions after 1st July, 1945 creating rights for periods over one year are voidable at the option of the Government which may affirm or disaffirm them. In regard to such transactions, no question of termination arises as it is within the rights of the Government to disaffirm them.
The above interpretation is in accord with the rule of construction namely, that a proviso is a proviso to the section. Further, this also accords with the discernible intention of the legislature. The clue to the intention of the legislature is found in the distinction made between the right in land created after 1st July, 1945 and that created before 1st July, 1945. It is common case that on that date, the ruling party i.e., the congress party had decided to implement their policy of abolishing the zamindaris.
The legislature expected that landholders would create rights after that date to defeat the provisions of the anticipated legislation. Therefore, it followed the usual device adopted by legislatures in giving retrospective effect with a view to ignore such alienations after that date and at the same time save the rights created for a year presumably because such creation of rights was in the usual course of management and enjoyment.
If the construction sought to be put upon the provision by the petitioner is adopted, it would lead to many anomalies. If the third proviso was treated as a proviso to the second proviso the second provision would become otiose, for, if the interest created in any land before or after 1st July, 1945, can be terminated subject to the payment of compensation, the third proviso alone would have achieved that object.
If the third proviso were treated as a proviso to the second proviso, the Government would net be in a position to terminate transactions creating interest in land entered into before 1st July, 1945 even if public interest demand such termination. It would also lead to the incongruous position that while the leases of a private land for periods over one year are not enforceable against the Government under the second proviso, under the third proviso they are precluded from being terminated.
The same interpretation was accepted by a Divisional Bench of the Madras High Court in A. M. S. S. V. M. & Co. v. State of Madras, 1953-2 Mad LJ 587: (AIR 1954 Mad 291) (E). At page 601 (of Mad LJ): (at p. 302 of AIR), Venkatarama Ayyar, J., who delivered the judgment on behalf of the Bench stated the effect of the section in three propositions:
Rights validly created prior to 1st July, 1945 will be valid.
Such rights, however, may be determined under the third proviso if it is in the public interest to do so and in such cases compensation will be payable under S. 20 (2) and
Rights created after 1st July, 1945, if they are for a period exceeding one year, are liable to be avoided under the second proviso. We respectfully agree with the said observations. We, therefore, hold on the basis of the finding that the lease was executed in favour of the petitioner after 1st July, 1945, and that the Government was entitled to avoid the lease without paying compensation.
The next contention of the learned counsel is that S. 20 of the Act is beyond the legislative competence of the Madras Legislature. It is argued that the taking out of a lease for working slate mines is a commercial venture and that the Madras Legislature could not make any law for the compulsory acquisition of commercial undertaking.
In support of this contention, reliance is placed upon the Judgment of the Supreme Court in. Th The Rajahmundry Electric Supply Corporation Ltd. Vs. The State of Andhra, where it was held that there was no entry in any of the three lists of the Seventh Schedule of the Government of India Act, 1935 relating to the compulsory acquisition of any commercial or industrial undertaking. To apply this decision, it must be established that the lease in question is a commercial undertaking within the meaning of that decision.
In Stroud''s Judicial Dictionary a commercial venture has been defined as a venture where capital is to be laid out on any work and a risk run of profit or loss. This definition is culled out of the observations made by Campbell, in McKay v. Rutherfurd, (1848) 6 Moo PCC 413 (G). On the basis of this definition it is contended that, as the petitioner is working the state mines as a commercial venture, the Legislature could not make any law to acquire that venture. There is a fallacy underlying this argument.
Under S. 20, the Government is authorised to disaffirm or terminate transactions creating rights in land. It does not in terms authorise the Government to acquire any commercial ventures. Nor does the Government purport to acquire any commercial venture in the present case. Under the lease deed executed in favour of the petitioner dated 10-12-47, the landholder in terms created a lease-hold interest in specified villages in favour of the lessee for quarrying purposes. The fact that the lessee used the lease-hold for a business purpose does not affect the question for, under the section, a commercial venture is not acquired but only the interest in the land is terminated. Section 20, therefore, was within the legislative competence of the Madras Legislature.
The constitutional validity of the second proviso to S. 20 is also questioned on the ground that, under S. 299 of the Government of India Act, the legislature cannot make a law for the acquisition of land without fixing the amount of compensation or without specifying the principles on which and the manner in which, it is to be determined. By this argument has no force in view of Art. 3 (6) and Art. 31 (b) of the Constitution substituted by the Constitution (Fourth Amendment Act, 1955. Art 31 (6) says:
Any law of the State enacted not mo(sic) than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the President for his certification and thereupon, if the President by public no (sic)fication so certifies, it shall not be called question in any Court on the ground that contravenes the provisions of Cl. (2) of the article or has contravened the provisions sub-s. (2) of S. 299 of the Government of In(sic) Act, 1935.
Article 31-B: Without prejudice to the generality of the provisions contained in Art. 31-A, none of the Acts and Regulations spe(sic) field in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, ever to have become void, on the ground to such Act, Regulation or Provision is inconstant with, or takes away or abridges any of rights conferred by, any provisions of this (sic) and notwithstanding any judgment decree order of any Court or tribunal to the contr(sic) each of the said acts and regulations sh(sic) subject to the power of any competent Legislature to repeal or amend it, continue in fo(sic).
It is conceded that Act 26 of 1(sic) falls within the scope of the aforesaid two provisions. If so, it follows that S. 20 of the cannot be questioned on the ground that said provision is in contravention of the provisions of S. 299 of the Government of India or, is inconsistent with or takes away abridges any of the rights conferred by III of the Constitution.
Even so, it is contended that, the Art. 31 (6) precludes the petitioner from questioning the validity of the second proviso S. 20 on the ground that it contravenes provisions of sub-s. (2) of S. 299 of the cerement of India Act, it does not preclude from questioning the same for the reason it violates the provisions of S. 299 (1) of Government of India Act. This argument be repelled on two grounds.
Under S. 299 (1), a person can be prived of property by the authority of law it does not impose a condition that the law should fix the amount; of compensation the deprivation. It cannot be denied that petitioner was deprived of the property by authority of law, under the provisions of XXVI of 1948. That apart it has now authoritatively decided by the Supreme in Dwarkadas Shrinivas of Bombay Vs. The Sholapur Spinning and Weaving Co. Ltd. and Others, that Cls. 1 of Art. 31 of the Constitution deal writ same aspect of the compulsory acquisition property. Mahajan J. observed at p. 701 (of SCR) : (at p. 128 of AIR) :
The result of the above discussion is that, in my opinion, Art. 31 is a self-contained provision delimiting the field of eminent domain and Art. 31 Cls. 1 and 2 deal with the same topic of Compulsory acquisition of property.
Sub-section 1 of S. 299 of the Government of India Act is in pari materia with Art. 31 (1) of the Constitution. Sub-section 2 of S. 299 of the Government of India Act, though it differs in some respects in the matter of phraseology, in effect lays down the same principle as laid down by Art. 31 (2) of the Constitution. The construction put upon by he Supreme Court on the provisions of Article 31 (1) and (2) apply with equal force to he construction of sub-sections 1 and 2 of (sic) 299 of the Government of India Act.
The two sub-sections of S. 299, therefore, (sic)eal with the same subject-matter, namely, the acquisition of property. In this view, the omission of S. 299 (1) in Art. 31 (6) of the Constitution does not help the petitioner as S. 299 (1) does not provide for a statutory protection different from that given under S. 299(2).
The next contention of the learned counsel is based upon the provisions of the (sic)le of Goods Act. It is argued that under the document of 1947, the landholder sold, before (sic)s estate vested in the Government, the right (sic) excavate and remove slate in the villages question and, therefore, the vesting of those lages in the Government after such sale would not affect the rights of the petitioner.
In support of his contention reliance is (sic)ced upon the decision of the Firm Chhotabhai Jethabai Patel and Co. and Others Vs. The State of Madhya Pradesh, Under (sic) Madhya Pradesh Abolition of Proprietary (sic)ghts (Estates, Mahals, Alienated Lands) Act, of 1950, the estates in that State were abolishment.
Long before the date of vesting of the (sic)hts in the State, the proprietor entered into (sic)tracts with third parties giving them the (sic)ht to cut, gather and carry away various (sic)est produce. The question raised was where the State had the right to interfere with rights of persons under such contracts.
The Supreme Court held, having regard to provisions of the Act, that those rights (sic)e not affected by Madhya Pradesh Act I 1950. Section 3 of that Act provided that, and from a date to be specified by a notification by the State Government, all proprietary its in an estate or mahal vesting in a pro(sic)tor shall pass from him and vest in the free from all encumbrances. Adverting this provision, Chandrasekhara Ayyar J., (sic) delivered the judgment on behalf of the (sic)rt observed at p. 100 (of SCJ) : (at p. 111 AIR):
The respondent State cannot invoke in its S. 3 sub-cl. 1 of the Act which speaks of vesting of proprietary rights free from all embraces because the rights of the petitioner either as buyers or lessees or licencees are not encumbrances as ordinarily under Stood.
Dealing with the argument based upon the Sale of Goods Act, the learned Judge observed:
The goods covered by the present petitions are goods which have a potential existence and according to the decisions discussed by the learned author, there can be a sale of a present right to the goods as soon as they come into existence. Whether title passes on the date of the contract itself or later is really dependent on the intention of the parties, and as already stated, in these petitions the stipulated consideration has passed from the transferees to the proprietors and possession also has been taken.
It is, therefore, clear from the aforesaid observations that the Supreme Court decided the case in favour of the petitioner on three grounds: (1) The transferees are licensees to cut, gather and carry the produce in the shape of tends leaves and, therefore, they are not proprietors within the meaning of the Act. (2) The rights created are not encumbrances within the meaning of the Act; and (3) before the Act, the property in the goods passed to the transferees.
The question in this case falls to be decided on the provisions of Act XXVI of 1948. Under S. 3(b), the entire estate including all communal lands and porambokes, other non-ryotj lands; waste lands, pasture lands, lanka lands, forests, mines and minerals, quarries, rivers, and streams, tanks and irrigation works, fisheries and ferries shall stand transferred to the Government and vest in them free of all encumbrances.
Under S. 3(c) all rights and interests created in or over the estate before the notified date by the principal or any other landholder shall as against the Government cease and determine. Section 20 saves from the operation of S. 3 of any right created by a landholder, whether by way of lease or otherwise, including rights in any forest, mines or minerals, quarries, fisheries and ferries. But, in regard to rights created after 1st July, 1945, the right is not enforceable against the Government at his option.
Under the Madhya Pradesh Act, only the rights of the proprietor vested in the Government free from encumbrances. But, under the Madras Act not only the entire estate vests in the Government but all rights and interests created in the estate are determined. The second proviso to S. 20(1) also declares that any right created in any land, whether by way of lease or otherwise in respect of quarries also is not enforceable against the Government.
The document dated 10-12-47 certainly created rights and interests in the estate and it purports to be a lease of the villages specified in the deed. The Rajah is the lessor and the petitioner is the lessee. The term of the lease was fixed at 20 years. A purpose of the lease was to work the slate quarries. A rent of Rs. 12,000/- is fixed under the lease deed.
It is clear from the recitals in the document that it is a lease of villages for querying purposes and, therefore, it creates a right and interest in the estate within the meaning of S. 3 (c) and right in any land by way of lease or otherwise within the meaning of S. 20 (1). The lease in question therefore, clearly comes within the mischief of the second proviso to S. 20(1).
We cannot also agree with the learned counsel that the document dated 10-12-1947 was a sale of goods namely, the sale of state agreed to be excavated in the villages. In the Madhya Pradesh Case, the contracts created no interest in the trees or the plants themselves but they were simply and solely contracts giving to the grantees the right to pick and carry away the leaves which of course implied the right to appropriate them as their own property.
But the observations of the Supreme Court indicate that the said contracts amounted to sale of goods. The indenture dated 10-12-1947, with which we are now concerned, is not a sale of the state material. It is in terms a lease creating interest in the lessees in respect of specified villages for a stated rent. It is not possible, therefore, to hold that under the document the goods, namely, the stones to be quarried were sold to the petitioner. The Supreme Court judgment does not, in any way, help the petitioner. We reject this contention.
Lastly, reliance is placed upon the Mineral Concession Rules of 1949 and it is I contended that, under R. 47 of the said rules, the lease in his favour is renewable at the petitioner''s option for one term not exceeding the duration of the original lease. A Division Bench of the Andhra High Court in Balarama Reddy v. Collector of Nellore District, 1955 Andh LT (Civil) 706: (AIR 1956 Andhra 81) (J) held that the said rule made in the exercise of statutory power conferred on the Central Government was clearly enforceable against the State.
But a statutory right to renew pre-supposes the existence of a valid lease. As we have held that the lease in his case was voidable at the option of the Government and as the Government did not affirm the lease, there is no valid lease for the rule to operate upon. This argument therefore, has no force and must be rejected.
The result is that the three petitions fail and are dismissed with costs. Advocate''s fee Rs. 200/- each the 1st and 3rd petitions (W.P. No. 1/56 and W.P. No. 470/57).