Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4123 OF 2012

Gohil Jesangbhai Raysangbhai & Ors. …

Appellant (s)

Versus

State of Gujarat & Anr. …

Respondent (s)

WITH

CIVIL APPEAL NO.4124 OF 2012

CIVIL APPEAL NO.4125 OF 2012

CIVIL APPEAL NO.4126 OF 2012

CIVIL APPEAL NO.4127 OF 2012

CIVIL APPEAL NO.4129 OF 2012

CIVIL APPEAL NO.4130 OF 2012

CIVIL APPEAL NO.4131 OF 2012

CIVIL APPEAL NO.4132 OF 2012

CIVIL APPEAL NO.4133 OF 2012

CIVIL APPEAL NO.4134 OF 2012

Page 2 CIVIL APPEAL NO.4135 OF 2012

J U D G E M E N T

H.L. Gokhale J.

All these Civil Appeals raise the questions with

respect to the validity of Section 43 of Bombay Tenancy and

Agricultural Lands Act, 1948 as applicable to the State of

Gujarat, now known in the State of Gujarat as Gujarat

Tenancy and Agricultural Lands Act, 1948 (“Tenancy Act” for

short). This section places certain restrictions on the transfer

of land purchased or sold under the said Act. These appeals

raise the questions also with respect to the validity of

resolution dated 4.7.2008 passed by the Government of

Gujarat to give effect to this section, and which resolution

fixes the rates of premium to be paid to the State

Government for converting, transferring, and for changing

the use of land from agricultural to non-agricultural purposes.

Thirdly, these appeals seek to challenge the minimum

2

Page 3 valuation of land as per the rates contained in the list called

as “Jantri” prevalent since 20.12.2006.

2. The Tenancy Act was passed way-back in the year

1948, as a beneficial legislation and as a part of agrarian

reform. This section has been amended twice thereafter,

first in 1960 and then in 1977. The aforesaid challenge was

first taken in the High Court of Gujarat by filing various

Special Civil Applications (i.e. Writ Petitions) bearing Spl. C.A.

No.12661 of 1994 and others which came to be dismissed.

Thereafter the Letter Patent Appeals bearing Nos.1127 of

2008 and others were filed against the judgments rendered

by Single Judges in these different Special Civil Applications.

The judgment rendered by a Division Bench dated 3.5.2011

in a group of these Letter Patent Appeals and Special Civil

Applications once again repelled the challenge. This common

judgment has led to this group of 12 Civil Appeals. The

issues raised in these Civil Appeals are by and large similar,

though there are some additional points in some of these

3

Page 4 Civil Appeals depending upon the facts of each of those

cases.

3. Mr. Huzefa Ahmadi and Mr. P.H. Parekh, both

senior counsel, and Mr. Bharat Patel, learned counsel, have

amongst others appeared for the appellants. Mr. Rohinton

Nariman, senior counsel and Ms. Hemantika Wahi have

appeared for the State of Gujarat and its officers to defend

the impugned judgment.

4. The above referred Section 43 of the Tenancy Act

reads as follows:-

“43.Restriction on transfers of land

purchased or sold under this Act.- (1) No land

or any interest therein purchased by a tenant

under section 17B, 32, 32F, 32-I, 32-O, 32U, 43-ID

or 88E or sold to any person under section 32P or

64 shall be transferred or shall be agreed by an

instrument in writing to be transferred, by sale,

gift, exchange, mortgage, lease or assignment,

without the previous sanction of the Collector and

except in consideration of payment of such

amount as the State Government may by general

or special order determine; and no such land or

any interest, there shall be partitioned without the

previous sanction of the Collector.

Provided that no previous sanction of the Collector

shall be required, if the partition of the land is

among the members of the family who have direct

blood relation or among the legal heirs of the

tenant:

4

Page 5 Provided further that the partition of the land as

aforesaid shall not be valid if it is made in

contravention of the provisions of any other law

for the time being in force;

Provided also that such members of the family or

the legal heirs shall hold the land, after the

partition, on the same terms, conditions,

restrictions as were applicable to such land or

interest thereat therein purchased by the tenant

or the person.

(1A) The sanction under sub-section (1) shall

be given by the Collector in such circumstances

and subject to such conditions, as may be

prescribed by the State Government.

(1AA) Notwithstanding anything

contained in sub-section (1), it shall be lawful for

such tenant or a person to mortgage or create a

charge on his interests in the land in favour of the

State Government in consideration of a loan

advanced to him by the State Government under

the Land Improvement Loans Act, 1884, the

Agriculturists’ Loan Act, 1884, or the Bombay Non-

Agriculturists’ Loans Act, 1928, as in force in the

State of Gujarat, or in favour of a bank or co-

operative society, and without prejudice to any

other remedy open to the State Government, bank

or co-operative society, as the case may be, in the

event of his making default in payment of such

loan in accordance with the terms on which such

loan was granted, it shall be lawful for the State

Government, bank or co-operative society, as the

case may be, to cause his interest in the land to

be attached and sold and the proceeds to be

applied in payment of such loan.

5

Page 6 Explanation, - For the purposes of this sub-section,

“bank” means –

(a)the State Bank of India constituted under the

State Bank of India Act, 1955;

(b)any subsidiary bank as defined in clause (k)

of section 2 of the State Bank of India (Subsidiary

Banks) Act, 1959;

(c)any corresponding new bank as defined in

clause (d) of section 2 of the Banking Companies

(Acquisition and Transfer of Undertakings) Act,

1970;

(d)the Agricultural Refinance and Development

Corporation, established under the Agricultural

Refinance and Development Corporation Act,

1963.

(1B)Nothing in sub-section (1) or (1AA) shall

apply to land purchased under section 32, 32F or

64 by a permanent tenant thereof, if prior to the

purchase, the permanent tenant, by usage,

custom, agreement or decree or order of a court,

held a transferable right in the tenancy of the

land.

(2)Any transfer or partition, or any agreement of

transfer, or any land or any interest therein in

contravention of sub-section (1) shall be invalid.”

5. The English version (as incorporated in the

impugned judgment) of Gujarat Government Resolution

dated 4.7.2008 to give effect to this section, and which

resolution lays down the rates of premium reads as follows:-

6

Page 7 “Regarding brining simplification in the procedure of

converting the land of new tenure under new and

impartible tenure and under the restricted tenure of

Tenancy Act into old tenure for the agricultural or

Non-agricultural purpose.

Government of Gujarat

Revenue Department

Resolution No.NSJ-102006-571-J (Part-2)

Sachivalaya Gandhinagar.

Dated 04/07/2008

Preamble:-

The prior permission of the Collector shall be

required to be obtained after making payment of the

consideration prescribed by the State Government,

by issuing special or general order for transferring

any land purchased by the tenants, under Sections-

17-kh, 32, 32-chh, 32-t, 32-d, 32-bh & 43-1-gh or

Section 88-ch or any land sold to any person under

Sections 32-g or 64, as per section-43 (1) of Bombay

Tenancy & Agricultural Lands Act 1948 or its interest,

sale, gift, transfer, mortgage, lease or transfer of

name or executing written present for transfer or any

interest. Without obtaining prior permission of the

Collector, partition of any such land or any interest

therein can not be made. According to Section 43(1-

A), the Collector is required to grant permission as

per the circumstances prescribed by the Government

and as per Section 73-kh of Bombay Land Revenue

Code, 1879, by virtue of this Act or by virtue of any

condition connected with type of tenure, without

prior permission of State Government, the Collector

or any officer authorized by the State Government,

any land holding can not be transferred in the name

of another person or its partition can not be made.

On making payment of the amount prescribed by the

State Government by a special or general order,

such permission can be granted.

The prior permission of the Collector/Government is

required to be obtained for transfer, change of

purpose or partition of the rented land (including the

land allotted to the Ex-armymen), and the land

granted or re-granted under different tenure and

7

Page 8 under Inami Abolition Act allotted for the agricultural

purpose vide different resolutions of the Government

and land reserved for cattle. The State Government

has implemented the policy in respect of converting

such land in old tenure so that there may be

simplification in transfer of land known as new

tenure and in other transaction.

According to the resolution No.JMN/3997/83/A dated

15/01/98 of the department, at the time of granting

such land wherein the interest of Government is

included for non-agricultural purpose, the procedure

of the assessment of the value of the land is being

conducted through the Committee at District Level

and Sate Level. Much time is consumed in this

procedure of assessment of value at the various

stages and the time limit is not prescribed for

assessment of value. Considering all these facts, the

State Government had decided to adopt the

approach valuation based on Jantri vide Resolution

dated 20/12/2006 No.NSHJ/102006/571/J. The time

of public shall be saved by its acceptance and

uniformity in respect of valuation in the entire State

shall be maintained. Thus, it was under

consideration of the Government to bring

simplification by applying the procedure of valuation

based on jantri by making change in existing

valuation procedure and by putting into force one

resolution in this regard instead of different

resolutions.

-:: R E S O L U T I O N ::-

On the basis of the letter No.STP/102008/174/H.1

dated 31/03/2008 of the Revenue Department, for

the purpose of Stamp duty, a new Jantri has been put

into force by issuing the Circular No. Stamp/

Technical/07/08/1512 dated 31/03/2008 with effect

from 01/04/2008 by the Superintendent of Stamps,

Gandhinagar. After studying and careful

consideration, the Government has held that the

valuation of the land of new and impartible tenure

and of restricted tenure type of Tenancy Act is to be

8

Page 9 done as per the rate of Jantri (as per Annual

Statements of rates-2006 and as per the

amendments made from time to time).

By consolidating all resolutions/circulars existing

instructions in respect of valuation, it has been

decided to follow the following procedure.

1. The new policy of the rates of premium for

converting and transfer/ for change of purpose of

land of new and impartible and restricted tenure land

from agricultural to agricultural purpose or non-

agricultural purpose, shall be as under.

Sr.

No.

Purpose Area Tenur

e

Rate of

premiu

m

Transfer at

which type of

tenure

1 2 3 4 5 6

1 From

Agricultural

to the

purpose of

agricultural

old tenure

The entire rural

area of the State

except following

Urban Areas,

East, area under

ULC, Mahanagar

Palika area,

Urban

Development

Authority area,

Municipality

area, Notified

area,

cantonment area

After

15

years

Zero It shall be

transferred

for the

purpose of

agricultural

at old tenure,

but premium

shall be

liable to be

paid for non-

agricultural

purpose.

2 From

Agricultural

to the

purpose of

agricultural

old tenure

The entire rural

area of the State

except following

Urban Areas,

East, area under

ULC, Mahanagar

Palika area,

Urban

Development

Authority area,

Municipality

area, Notified

area,

After

15

years

50% It shall be

transferred

for the

purpose of

agricultural

at old tenure,

but premium

is liable to be

paid for non-

agricultural

purpose

9

Page 10 cantonment area

3 For Non-

agricultural

purpose

The area of the

entire State

After

15

years

80% The land

shall be

considered of

old tenure

after

sale/transfer

or change of

purpose

The aforesaid policy shall be equally applied in the

entire State except the exception of the following (A)

and (B).

(A)At the time of transfer, when the land of rural

area of new and impartible tenure or restricted type

of tenure is allotted as a gift or present to the

Educational or Charitable institutes for non-

agricultural purpose, 50% amount shall be recovered

as premium.

(B)The following rates shall be applicable to the

land holding under Kutch Inami Abolition Act and

new and impartible tenure.

Sr.

No.

Purpose Area TenureRate of

premium

Transfer at which

type of tenure

1 2 3 4 5 6

1 From

Agricultural

to the

purpose of

agricultural

old tenure

Rural

Area

After

15

years

Zero It shall be

transferred for the

purpose of

agricultural at old

tenure, but

premium is liable

to be paid for non-

agricultural

purpose

2 From

Agricultural

to the

purpose of

agricultural

old tenure

Urban

Area

After

15

years

20 (twenty)

times

amount of

assessment

It shall be

transferred for the

purpose of

agricultural at old

tenure, but

premium is liable

to be paid for non-

agricultural

purpose

3 For Non- The After 50% The land shall be

10

Page 11 agricultural

purpose

urban

and

rural

areas

15

years

considered under

old tenure after

sale/transfer or

change of

purpose.

2. The procedure of converting the land of new

tenure into old tenure for the purpose of

agricultural to agricultural (for the purpose of

Sr.No. 1 & B(1) of the aforesaid para No.1).

(A)If such lands of New Tenure and Restricted

tenure under Tenancy Act have been in continuous

possession for 15 year or more than it since its grant

to the last date of every month, are liable to be

converted into old tenure for agricultural purpose,

after eliminating the entry “New & Impartible

Tenure” and noting “liable for premium only for non-

agricultural purpose” on its place, the Mamalatdar of

concerned Taluka on his own motion shall issue such

orders within 15 days and shall have to inform the

concerned holder in writing. At the same time, it

shall be the responsibility of the Mamalatdar to get

the mutation entry of the said order entered into the

Right of Record and to get it certified as per rules.

(B)In the cases also wherein, the land is required

to be converted from agricultural to agricultural

purpose into old tenure by recovering 50% premium

or 20 times amount of assessment, the Mamalatdar

shall have to issue orders as stated above in 2(A)

after recovering the premium. In the case wherein

50% premium is required to be recovered in Urban

Area for agricultural to agricultural purpose, the

procedure as mentioned in paragraph No.3 shall

have to be adopted.

(C)It shall be the responsibility of the Prant Officer

to see that the entry of such orders and its mutation

entry are made in record without fail. The Prant

Officer shall have to forward the certificate to the

effect that any such entry is not remained to be

entered in the record to the Collector till the date

25

th

of every month.

(D)On finalization of the certified mutation entry

as per the aforesaid Sr.No.2 (A), the details to the

11

Page 12 effect that “liable for premium only for non-

agricultural purpose” shall have to be mentioned

certainly in bold letters in column of tenure and

other rights of Village Form No.7/12.

(E)If breach of tenure is committed in the land,

the procedure for breach of tenure shall be initiated

towards such land instead of converting them into

old tenure.

(F)Moreover at the time of granting such

permission if there is any encumbrance upon the

land, then the abovementioned concerned officer

shall have to issue orders accordingly by granting

permission of transfer in old tenure including

encumbrance.

(G)In the context of lacuna in respect of the order

issued for converting the land of new tenure

including Tenancy Act into old tenure for agricultural

purpose or the mutation in that regard, the

competent authorities shall have to conduct the

revision proceedings as per the standing instructions

issued by the Government.

(H)The above mentioned procedure shall have to

be reviewed in the meeting of Revenue officers held

by the Collector every month.

(I)In the case of breach of tenure, for this

purpose, 15 (fifteen) years shall have to be reckoned

from the date of order of regnant issued lastly.

3. Procedure of converting from New Tenure to

Old Tenure for Non-agricultural purpose.

(A)On receipt of application in prescribed form as

per Appendix –I by Collector, application shall have

to be forwarded to Mamlatdar office within 7 days

(Seven) for scrutiny as per check list. On receipt of

such application after scrutiny, Mamlatdar shall have

to submit the report to Prant officer within 20

(twenty) days after making all types of scrutiny and

site inspection and the Prant officer shall have to

forward the report to Collector after verification

within 10 days.

12

Page 13 (B)After receiving report of Mamlatdar through

Prant Officer, after verifying all record, Collector shall

have to take decision within 30 (thirty) days and the

said decision shall have to be informed to concerned

person. The calculation of the amount of premium

shall have to be made as per the rate of Jantri

prevailing on the date of decision.

(C)If premium is to be paid as per decision of the

Collector, then on getting such information the

concerned person shall have to pay the amount of

premium within 21 (twenty one) days.

(D)After depositing amount of such premium, the

Collector shall have to pass order in this regards

within 3 (three) days.

(E)If amount of premium is not paid within twenty

one days, then assuming that concerned person is

not interested in getting permission and chapter

should be filed. However, in some cases, if

concerned person submits an application then and if

Collector considers the reasons just, then as per the

merits of the case, by the reasons to be recorded in

writing, instead of 21 (twenty one) days, the

Collector can extend till one year from date of

intimation of decision. But if during this period there

is change in price of Jantri then premium shall have

to be recovered accordingly. After one year

applicant shall have to submit an application afresh.

(F)When the permission is required to be granted

to the charitable institutes for non-agricultural

purpose after recovery, such institution is

required to have been registered under Public

Trust Act. In this regard Certificate of

registration before Competent

Authority/Charity Commissioner shall have to

be produced with file and audited accounts of

last three years. If the purpose of applicant’s

institution is only for “No profit No loss” basis,

for charitable activities like Charitable hospital,

dispensary, cattle house, Library, Elder house,

Orphan House etc. then such institution shall

have to be considered as Charitable Institution.

13

Page 14 (G)The check list regarding chapters to be given

for prior permission at the Collector level and

departmental level shall have to be prepared

as per Schedule-2 of herewith. The Collector

can call for check list and necessary

information if he deems fit.

4. Delegation of Powers:-

(A)Now premium is required to be recovered on

the basis of Jantri, all powers of all area of district

shall be vested with Collector.

(B)Instead of forwarding of the present the

chapter regarding valuation of more than Rs.50/- lacs

to Government, the chapters regarding valuation of

more than Rs.1 crore shall have to be forwarded to

Government for prior permission.

(C)As per above 4(B), the permission shall have to

be granted by making verification of record at

department level entirely in respect of the chapter

received by the department and by obtaining the

consent of the government.

5. Regarding considering rates of Jantri:

(A)When sale is required to be made from

agriculture to agriculture purpose, the valuation shall

be made by considering rate of agriculture Jantri

prevailing in Urban and Rural area.

(B)In rural area, when the land is used for non-

agriculture purpose, valuation shall be made by

considering rates of Jantri for that purpose.

(C)In urban area, for non-agriculture purpose,

valuation shall be made after considering rates of

Janri of developed land.

(D)When non-agriculture use is made for

educational, social, charity or other purpose, then

valuation shall be made in rural area, by considering

rate of Jantri for residential purpose and in Urban

14

Page 15 area, by considering rate of Jantri of the

development land.

(E)The Collector shall have to consider rate of

Jantri which are applicable to zone, ward or block

where the land is situated. The rate of Jantri of other

zone, ward or block shall not be considered.

(F)When “rate of developed land” is not

mentioned in Jantri of the area, valuation shall be

made by considering the purpose and rate of

prevailing Jantri of the said area.

6. Procedure for disposal of pending chapters:-

(a)In the pending chapters in respect of fixing

premium at district level and state level, in all

chapters wherein the decision is required to be taken

after 1/4/2008, the calculation of the premium shall

be made on the basis of the rate as per Jantri.

(b)The chapters which have not been placed in

the District Valuation Committee, such chapters

pending at District level, shall not be placed in the

District Valuation Committee, but their valuation

shall be made as per Jantri. The chapters which

have been sent to the Deputy Town Planner for

valuation, shall be called back and calculation of the

premium shall be made on the basis of rate as per

Jantri.

(c)The chapters decided by the District Valuation

Committee, shall also be disposed again at the

Collector level by deciding the premium on the basis

of the rate of Jantri.

(d)The chapters pending at the state level, shall

not be sent back to the district or shall not be

produced in the Valuation Committee of State level,

but permission shall be given by taking consent of

the Government and considering the rate of Jantri.

(e)The pending chapters which have been

valuated in the office of the Chief Town Planner and

which have not been valuated, shall be received

back and permission shall be given after taking

15

Page 16 consent of the Government and applying the price of

Jantri.

(f)The chapters sent back from the state level to

the district level for compliance, shall not be sent

back in the department, but as per above instruction,

the Collector shall have to dispose the chapters by

deciding the price on the basis of Jantri.

(g)In the cases where the chapters have been

received at the State level and necessity arises for

compliance on the basis of the record, the chapters

of the amount upto Rs.1/- (one) crore, shall be

disposed in accordance with rules by returning the

chapter and by making complete verification at the

Collector level as per the check list and by returning

the chapters be returned.

(h)In the chapters remained pending at the

district and the state level also, in all cases wherein

the permission order is required to be issued after 1-

04-2008 also, the orders shall have to be issued by

deciding the premium as per Jantri.

7. In the cases of land allotted under gifting of

land (bhoo-dan) and under The Gujarat Agriculture

Land Ceiling Act, 1960, any provision of this

resolution shall not be applied.

8. On implementation of the aforesaid procedure,

the resolutions/circulars mentioned in appendix-3 in

toto and the resolutions/circulars mentioned in

appendix-4 partly are superseded only for the part in

mentioned in column-4 of the Appendix-4.

In this manner, on account of superseding the

resolution entirely or partly, the orders issued before

01/04/2008 shall not be affected under the

provisions/instructions of these resolutions/circulars.

9. On the basis of the policy framed vide

resolution dtd. 20/12/2006 of the department for

bringing in force the procedure of valuation based on

new Jantri with effect from dtd. 01/04/2008, this

issue with the concurrence of finance department

16

Page 17 vide their note dtd. 15/05/2008 and 27/06/2008 on

this department file of even number.

By order and in the name of Governor of Gujarat,

[Anish Mankad]

Joint Secretary, Revenue Department,

State of Gujarat.”

The consequent requirements under Section 43 read

with aforesaid resolution dated 4.7.2008

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 provided under that Section. Section 43 with

which we are concerned in the present matter and which

appears in Part III of Chapter III of the Act. Chapter III

provides for Special rights and privileges of tenants, and

contains provisions for distribution of land for personal

cultivation. Part III, thereof, provides for restrictions upon

holding of land in excess of ceiling area. Section 43 has to be

seen in this context.

17

Page 18 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 Mohanlal 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 does

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.

18

Page 19 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 9

th

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 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, 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.

19

Page 20 9. As far as the determination of this amount is

concerned, the same was earlier entrusted to the District

Level Committee 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. 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 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 stamp

duty under the Bombay Stamp Act. Those rates in the Jantri

20

Page 21 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 shall be 80 per cent of the price received by the

agriculturists 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.

21

Page 22 It is also pointed out that the applications for 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 admeasuring about 4,875 sq. mts. at plot No. 65 in

revenue survey 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

22

Page 23 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 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 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

23

Page 24 has to be proportionate. The Jantri rates were being applied

in an arbitrary manner, and the premium at 80 per cent 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 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 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) SCC 203 to submit

that date of application is the material date. Reliance was

also placed on the judgment of this Court in State of Gujarat

Vs. Patel Raghav Natha reported in 1969 (2) SCC 187

24

Page 25 (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 90 days.

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) SCC 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 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

25

Page 26 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.

Consideration of the submissions

26

Page 27 16. We may at this stage refer to the judgment of the

Division Bench of the Gujarat High Court in Shashikant

Mohanlal (Supra) by P.N.Bhagwati, CJ as he then was in the

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:-

“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

27

Page 28 tenancy of the tenant within the time prescribed in

Section 31, the tenant became the deemed

purchaser of 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 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

28

Page 29 owner of it and there is no intermediary or

middleman to share the profits of his cultivation.

Since the tenant is made the deemed 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 32B 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

29

Page 30 Bombay 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 virtue of any conditions annexed

to the tenure by or under the Code is not

transferable or partible without the previous sanction

of the State Government, the Collector 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 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

appertained, on payment of the occupancy price equal to

twelve times of the amount of the full assessment of such

30

Page 31 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:

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

31

Page 32 appertaining thereto, a person in whom the

ownership of 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 restrictions 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.

32

Page 33 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 been permitted to be purchased by the tenants at

a much lesser price. As held in Shashikant Mohanlal

(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 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 should depart

therefrom while interpreting the provision.

21. It was submitted by the appellants 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

33

Page 34 injustice was highlighted in the case of Savitaben in Civil

Appeal No. 4129/2012. The fact however, remains that the

Section speaks of previous sanction. 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 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 party.

22. Rule 25C of the Rules framed under the Bombay

Tenancy and Agricultural Lands Act, 1948, was relied upon by

the appellants. It speaks about the circumstances in which,

and conditions subject to which sanction shall be given by the

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

34

Page 35 that transfer of an agricultural land for non-agricultural

purpose is not easy. It is only sub-clause (e) thereof under

which such a transferor will have to make his 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 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

35

Page 36 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 Patel 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.

………………………… ..J.

[ Surinder Singh Nijjar

]

……..……………………..J.

[ H.L. Gokhale ]

New Delhi

Dated : February 25, 2014

36