1951 (10) TMI 20 - SC - Indian Laws

Summary

Issues Involved:

1. Validity of the Government Resolution of 1865 as a grant or contract.
2. Applicability of the equity principle from Ramsden v. Dyson.
3. Acquisition of title by adverse possession.
4. Distinction between "rent" and "land revenue".
5. Right of the Government to assess land revenue under Section 8 of the Bombay City Land Revenue Act, 1876.

Detailed Analysis:

1. Validity of the Government Resolution of 1865 as a Grant or Contract:

The Supreme Court noted that the Government Resolution of 1865 was neither a valid grant nor an enforceable contract due to non-compliance with the statutory formalities required by Statute 22 & 23 Vic. C. 41. The High Court had agreed on this point, concluding that the resolution could not by itself operate to give any interest in the land to the respondent Corporation.

2. Applicability of the Equity Principle from Ramsden v. Dyson:

The High Court applied the principle from Ramsden v. Dyson, which was recognized by Jenkins C.J. in The Municipal Corporation of the City of Bombay v. The Secretary of State, to argue that the Government's right to levy assessment had been lost due to the equity arising from the facts and circumstances. The Supreme Court, however, questioned the applicability of this principle, especially in light of the Privy Council's decision in Ariff v. Jadunath, which limited the application of English equitable doctrines in Indian statutory contexts.

3. Acquisition of Title by Adverse Possession:

The Supreme Court held that the respondent Corporation had acquired a limited title to hold the land in perpetuity free from rent for the purpose of a market through adverse possession. This possession had been open, as of right, and uninterrupted for over 70 years. The Court emphasized that the immunity from paying rent was an inseparable incident of the title acquired by adverse possession.

4. Distinction between "Rent" and "Land Revenue":

The contention that "rent" and "land revenue" were distinct was not raised in the written statement or in the lower courts. The Supreme Court noted that the term "rent" in the Government Resolution of 1865 was used synonymously with "land revenue." The Court did not permit the appellant to raise this new contention at this stage.

5. Right of the Government to Assess Land Revenue under Section 8 of the Bombay City Land Revenue Act, 1876:

The Supreme Court examined whether the respondent Corporation had established a right in limitation of the Government's right to assess the land. The Court concluded that the Corporation had acquired a legal right to hold the land in perpetuity free of rent for the specific purpose of a market, which included immunity from payment of rent. This constituted a right in limitation of the Government's right to assess under Section 8 of the Act. The Court concurred with the High Court's interpretation that the words of Section 8 would apply to a case where total exemption from assessment was granted.

Separate Judgment by Patanjali Sastri J.:

Justice Patanjali Sastri dissented, arguing that the principle of Ramsden v. Dyson was not applicable and that the Government's right to levy assessment, being a prerogative right, could not be nullified by adverse possession. He emphasized that the respondent's possession of the land without payment of revenue did not destroy the Crown's prerogative right to impose assessment.

Separate Judgment by Chandrasekhara Aiyar J.:

Justice Chandrasekhara Aiyar concurred with the majority but added that the word "rent" in the Government Resolution meant "assessment." He argued that the Corporation's acquisition of title by adverse possession did not negate the representation made by the Government that no rent would be charged. He emphasized the importance of equity and good faith, concluding that the Government could not now go back on its representation.

Conclusion:

The Supreme Court dismissed the appeal, upholding the High Court's decision that the respondent Corporation had a right in limitation of the Government's right to assess the land, based on the equity arising from the long possession and the Government's representations.