http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7

PETITIONER:

MOTIPUR ZAMINDARI CO. LTD.

Vs.

RESPONDENT:

THE STATE OF BIHAR AND ANOTHER.RAJA JANKINATH ROY AND NAREND

DATE OF JUDGMENT:

17/04/1953

BENCH:

DAS, SUDHI RANJAN

BENCH:

DAS, SUDHI RANJAN

SASTRI, M. PATANJALI (CJ)

MUKHERJEA, B.K.

HASAN, GHULAM

BHAGWATI, NATWARLAL H.

CITATION:

1953 AIR 320 1953 SCR 720

ACT:

Bihar Land Reforms Act, 1950, ss. 2 (o) and (r), 3-

Applicability of Act to companies-"Person" "Proprietor"

"tenure-holder",meanings of.

HEADNOTE:

The word " person " in the definitions of " proprietor ""

and tenure-holder " contained in a. 2 (o) and s. 2 (r)

respectively of the Bihar Land Reforms Act, 1950, includes

companies incorporated under the Indian Companies Act, 1913.

There is nothing repugnant in the subject or context of the

Act to prevent the inclusion of a company within the terms

proprietor " and " tenure-holder ". On the contrary such

inclusion is necessary in order to give full effect to the

object of the Act.

Pharmaceutical Society v. The London and Provincial

Supply Association, Limited (1880) 5 App. Cas. 857

distinguished.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 62 and

63 of 1953. Appeals under Article 132 (1) of the

Constitution of India from the Judgment and Order dated 22nd

December, 1952, of the High Court of Judicature at Patna

(Ramaswami and Sarjoo Prosad JJ.) in Miscellaneous Judicial

Cases Nos. 238 and 242 of 1952.

P. R. Das (J. C. Sinha and L. K. Chaudhry, with him) for

the appellant in both the appeals.

M. C. Setalvad, Attorney-General for India (L. N.Sinha

and Bajrang Sahai, with him) for the respondents in both the

appeals.

1953. April 17. The Judgment of the Court was delivered by

S. R. DAB J.

721

DAS J.-This judgment disposes of Civil Appeals No. 62 of

1953 and No. 63 of 1953 which have been heard together.

The Motipur Zamindari Company Ltd., the appellant in Civil

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7

Appeal No. 6.) of 1953, was incorporated in 1932 under the

Indian Companies Act and has its registered office in

Bengal. It supplies sugar-cane to a sister concern named

Motipur Sugar Factory Ltd. Raja Jankinath Roy and Narendra

Nath Roy and Co., Ltd., the appellant in C. A. No. 63 of

1953, was incorporated in 1933 under the Indian Companies

Act and also has its registered office in Bengal. This

company owns Zamindari Properties in Purnea in the State of

Bihar as well as in Malda in the State of West Bengal. It

carries on business, amongst others, as banker and

financier.

On the 30th December, 1949, a bill entitled the Bihar Land

-Reforms Bill was passed by the Bihar Legislature and having

been reserved for the consideration of the President

received his assent on the 11th September, 1950. The Act so

passed and assented to was published in the Bihar Gazette on

the 25th September, 1950, and was brought into force on the

same day by a notification made by the State Government in

exercise of powers conferred on it by section 1(3) of the

Act. Many of the proprietors and tenure holders of

Zamindari estates took proceedings against the State of

Bihar for appropriate orders restraining the State

Government from taking over the estates under the provisions

of the Act which they claimed to be beyond the legislative

competency of the Bihar Legislature and otherwise void. On

the 12th March, 1951, a Special Bench of the Patna High

Court held that the Act was unconstitutional on account of

its contravention of article 14 of the Constitution. The

State of Bihar appealed to this Court. Pending that appeal,

the provisional Parliament passed the Constitution (First

Amendment) Act, 1951. The respondents in the main appeal

took proceedings in this Court, contending that the Act

amending the Constitution was invalid. This

722

Court however, on 5th October, 1951, upheld the validity of

the amending Act. On 6th November,' 1951, notifications

were issued under section3 of the Bihar Act declaring that

certain Touzies belonging to the appellants specified in the

notification had passed to and become vested in the State.

Both the appellants made separate applications to the Patna

High Court under article 226 of the Constitution praying for

mandamus or suitable direction or order restraining the

respondent from taking possession of their respective

estates or tenures by virtue of the said notifications and

for other ancillary reliefs. The appeals filed by the State

of Bihar against the order of the Special Bench declaring

the Act to be void came up for hearing before this Court and

this Court upheld the validity of the Act, except as to a

few provisions mentioned in the majority judgment which were

hold to be severable. Thereafter, the two applications made

by the two appellants under article 226 before the Patna

High Court came up for hearing and were dismissed by a Bench

of that Court on the 22nd December, 1952. The present

appeals have been filed with leave of the Patna High Court

against the said dismissal.

The question raised before the High Court was whether the

Act was, on its true construction, intended to apply to

Zamindari estates of companies incorporated under the Indian

Companies Act. In support of the appellants' contention

that it was not, it was urged -that the Bihar Legislature

had no authority to legislate with respect to trading

corporations or non-trading corporations whose objects were

not confined, to one State. Reference was made to entries

43, 44 and 45 of List I to show that it was Parliament alone

which was authorized to make law with respect to matters set

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7

forth in those entries. The contention was that the Bihar

Legislature in enacting the Act invaded the Union field and

so the Act was invalid. This argument was sought to be

reinforced by reference to the provisions of the Act and the

winding up provisions of the Companies Act. The Patna High

723

Court overruled this contention and Mr.P.R.Das appearing in

support of these appeals has not challenged this part of the

decision of the Patna High Court.

The main point urged by Mr. P. R. Das is that even if the

Bihar Legislature could make a law for acquiring Zamindari

estates of incorporated companies it did not, by the Act, in

fact do so. Section 3 authorises the State Government to

declare by notification that the estates or tenures of a

proprietor or tenure-holder have passed to and become vested

in the State. It will be recalled that it was under this

section that the State Government on the 6th November, 1951,

issued the notifications with respect to the estates of the

appellants situate within the State. Mr. P. R. Das's

principal contention is that the appellant companies do not

come within the terms, " proprietor" or " tenure holder" as

defined by the Act and consequently no part of their estates

were intended 'to be vested or did in fact vest in the

State. " Proprietor" is defined by section 2(o) as meaning

a person holding in trust or owning for his own benefit an

estate or a part of an state and includes the heirs and

successors-in-interest of a proprietor and, where a

proprietor is a minor or of unsound mind or an idiot, his

guardian, committee or other legal curator. Tenure-holder

is defined by section 2 (r) as meaning a person who has

acquired from a proprietor or from any tenure-holder a right

to hold land etc. The argument is that the word "person" in

the two definitions referred to above does not, in the

context of the Act, include a company. It is conceded that

under section 4(40) of the Bihar General Clauses Act the

word "person" would ordinarily include a company, but it is

urged by Mr. P.R. Das that the definitions given in that

section apply only where there is nothing repugnant in the

subject or context. His contention is that the definition

of "proprietor" and "tenureholder" indicates that a company

which owns Zamindaries is not covered by that definition.

We are unable to accept this contention. It is not disputed

94

724

that a company can own an estate or a part of an estate and,

indeed, the appellant companies are fighting these appeals

only to protect the estates they own. Therefore, they come

within the first part of the definition. The definition

after stating what the word means proceeds to state what

else the definition would include under certain specified

circumstances, namely, the heirs and successor-in-interest

etc. The word "heir" certainly is inappropriate with regard

to a company, but there is nothing inappropriate in the

company having a successor in interest. It is pointed out

that there is no provision in the definition of proprietor

to include the directors, managing agents and, in case of

winding up, the liquidator of the company. This

circumstance does not appear to us to be a cogent reason for

holding that the word "proprietor" as defined does not cover

a company. It is to be noted that the agent or, in case of

insolvency, the official assignee or receiver of an

individual proprietor are also not included in the

definition. Reference to proprietor who is a minor or of

unsound mind or an idiot and his guardian etc., was

obviously necessary because those proprietors suffer from

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7

legal disabilities.

Mr. P. R. Das refers us to various sections and rules

framed under section 43 of the Act to show that' only

natural persons were intended to be affected by the Act,

because, ha urges, the company is not competent to do the

acts therein referred to. It is not ,disputed by Mr. P. R.

Das that there is no difficulty on the part of an

incorporated company to do all these acts by its directors

or managing agents or other officers empowered in that

behalf by its articles of association, but his contention is

that the provisions of the Indian Companies Act should not

be imported into the consideration of the provisions of his

Act. He relies primarily on the case of Pharmaceutical

Society v. The London and Provincial Supply Association,

Limited(1) whore it was held,that a corporation

(1) (1880) L.R. 5 App. Cas. 857.

725

did not come within the word "person" used in the Pharmacy

Act, 1868 (31 & 32 Vic., Chapter 121). Reliance was placed

upon the observations of Lord Selborne L.C. at page 863.

The preamble to that Act recited, amongst other things, that

it was "expedient for the safety of the public that persons

keeping open shop for the retailing, dispensing or compound-

ing of poisons, and persons known as chemists and druggists

should possess a competent practical knowledge of their

business." This clearly comtemplated persons skilled in

matters pharmaceutical and not impersonal corporate bodies

which would know nothing about that particular business.

Indeed, Lord Blackburn in his speech in the House of Lords

in the Pharmaceutical Society's case(1) referred to this

preamble and observed at page 870:-

"Stopping there, it is quite plain. that those who used

that language were not thinking of corporations. A

corporation may in one' sense, for all substantial purposes

of protecting the public, possess a competent knowledge of

its business,, if it employs competent directors, managers,

and so forth. But it cannot possibly have a competent

knowledge in itself. The metaphysical entity, the legal

'person', the corporation, cannot possibly have a competent

knowledge. Nor I think, can a corporation be supposed to be

a 'person known as a chemist and druggist'."

His Lordship then referred to the provisions of sections

1 and 15 of that Act and came to the conclusion that the

word "person" in that Act. meant a natural person. The

effect of 'that case is that whether the word "Person" in a

statute can be treated as including a corporation must

depend on a consideraiion of the object of the statute and

of the enactments passed with a view to carry that object

into effect. In view of the object of that Act as recited

in the preamble there could be no manner of doubt that the

word "person" in that Act could not possibly, include a

corporation. Lord Selborne towards the end of page 863

indicated, by reference to the 18th

(1) (188o) L.R. 5 App. Cas. 857

726

section, that the legislature by the word "person" referred

only to individual persons as it was clearly repugnant to

the subject of that Act to include a corporation within the

word "person" as used in 'that Act. Mr. P. R. Das urges

that the judgment of Lord Selborne was founded on the fact

that the corporation could not come within the term "person"

on the ground that it could not make an application in

writing signed by it. From this Mr. P. R. Das urges that

the necessary implication of this part of the judgment of

Lord Selborne is that it was not permissible to take the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7

provisions of the Companies Act into consideration for

construing another Act. If that were the implication of the

speech of Lord Selborne, with respect, we are unable to

accept the same. Indeed, one cannot think of a company

unless one has in view the provisions of the Companies Act,

for a company is the creature of the Companies Act. Its

existence, powers and rights are all regulated by that Act.

The trend of the, speeches of the noble Lords in the case

relied on by Mr. P. R. Das is that the object of the

particular Act under consideration was entirely repugnant to

the word "corporation" being included within the term

"Person" as used in that Act, and as we apprehend it, that

decision lays down nothing beyond that.

In support of his contention that a company owning an

estate was never intended to be affected by the Act, Mr.P.

R. Das draws our attention to the winding up sections of the

Indian Companies Act and urges that it is not possible to

fit in the scheme of winding up into the scheme of the Bihar

Act. If the Zamindari assets of the company are taken over

and compensation is paid by non-transferable bonds it will,

he contends, be impossible, to apply the law of winding up

in case the company goes into liquidation. There will,

according to him, be conflict of jurisdiction between the

Court where the winding up is proceeding, which may

conceivably be in another State, land the Bihar Government

and its officers. 'We see no force in this contention.

Upon a

727

notification being issued under section 3, the Zamindari

estate will vest in the State and the company will cease to

have any interest in it. Its only right will be to receive

compensation. In case of winding up the liquidator will

have to pursue the remedy provided by this Act. He or the

company will be in no worse position than the official

assignee or official receiver of an individual proprietor

who may happen to become insolvent in another State.

Finally, Mr. P. R. Das strongly relies on section 41 of

the Act and contends that that section would be wholly

inapplicable to a company and that circumstance by itself

would indicate that the Bihar Legislature did not intend

that a company owning an estate should be governed by this

Act. A corporation, it is true, cannot be made liable for

treason, felony or any misdemeanour involving personal

violence or for any offence for which the only penalty is.

imprisonment or corporal punishment. (Halsbury, 2nd Edition,

Volume IX, article 5, p. 14). Section 41 does not prescribe

punishment by imprisonment only. Mr. P. R. Das suggests

that the infliction of imprisonment or fine would depend

upon the gravity of the offence and not on the character of

the offender. This argument, however, would seem to run

counter to the opinion of Lord Blackburn set forth at pages

869-870 of the report of the very case relied on by Mr. P.

R. Das. The recent cases of Director of Public Prosecutions

v. Kent and Sussex Contractors Limited(1) and Rex v. I.C.B.

Haulage, Limited and Another(2) seem to indicate that a

corporation may be convicted even of an offence requiring an

act of will or a state of mind. Apart, however, from the

consideration whether a company may be held guilty of wilful

failure or neglect, as to which we need not express any

definite opinion on this occasion, there can be no

difficulty in applying the provisions of section 41 to the

officers or agents of the company. On a notification under

section 3(1) being published the estate vests in the State.

Section 4 sets out the

(1) [1944] I.K.B. 14 6. (2) [1944] I.K.B. 551.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7

728

consequences of such vesting. Clause (g) of that section

empowers the Collector by written order served in the

prescribed manner to require any person in possession of.

such an estate or tenure or any part thereof to give up

possession of the same by a date specified in the order and

to take such steps or use such force as may be necessary for

securing compliance with the said order. If any officer or

agent of the company in the possession of the estate

wilfully fails or ignores to comply with such lawful order,

then surely he can be proceeded against under section 41.

Likewise, under section 40, the. officers therein mentioned

are authorized at any time before or after the date of

vesting by a written order served in the prescribed manner

to require a proprietor or tenureholder or any other person

in possession of such an estate or tenure or any agents or

employees of such proprietor, tenure-holder or other person

to produce at a time and place specified in the order such

documents, papers or registers or to furnish such informa-

tion relating to such estate or tenure as such officer may

from time to time require for any of the purposes of this

Act. A wilful failure or neglect to comply with such order

would clearly bring the recalcitrant officer or agent of the

company within the penalty provided under section 41.

Section 41 therefore, does not necessarily preclude the

application of the Act to incorporated companies.

It cannot be denied that a company is competent to own and

hold property. The whole. object of the impugned Act is

thus stated by Mahajan J. in the State of Bihar v. Kameshwar

Singh(1):

" Now it is obvious that concentration of big blocks of

land in the hands of a few individuals is contrary to the

principle on which the Constitution of India is based. The

purpose of the acquisition contemplated by the impugned Act

therefore is to do away with the concentration of big blocks

of land and means of production in the hands of a few

individuals and to so distribute the ownership and control

of the

(1) [1952] S.C. R. 889 at p. 941.

729

material resources which come in the hands of the State as

to subserve the common good as best as possible. In other

words, shortly put, the purpose behind the Act is to bring

about a reform in the land distribution system of Bihar for

the general benefit of the community as advised."

In view of this, purpose there is no reason to

differentiate between an individual proprietor and a company

which owns estates or tenures. Indeed, there is not only

nothing repugnant in the subject or context of the Act which

should prevent the inclusion of a company owning estate

within the definition of "proprietor", such inclusion is

necessary in order to give full effect to the very object of

the Act.

In Appeal No. 63 of 1953 Mr. P. R. Das raises an

additional point, namely, that the appellant company in that

appeal owns estates which are situate in Purnea in the

district of Bihar and in Malda in the district of West

Bengal but it has to pay a single Government revenue at

Purnea. It is further alleged that the appellant company

has let out portions of the estates on Patni leases, each of

the Patnis comprising land situate both within and outside

Bihar. The acquisition of that part of the estate, which is

situate in Bihar has made it difficult, if not impossible,

for the appellant company to pay its revenue or recover its

rent. That part of the estate which is in Bihar cannot be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7

severed from the rest and therefore the notification

covering only the portion of the estate situate in Bihar is

invalid. We do not think there is any substance in this

argument. As stated by the High Court it is a simple case

of apportionment of the revenue and also apportionment of

the rent. The necessity for such apportionment cannot

possibly affect the validity of the notification.

For reasons stated above these appeals fail and must be

dismissed with costs.

Appeals dismissed.

Agent for the appellants: B. B. Biswas.

Agent for the respondents: G. H. Rajadhyaksha.

730