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TMI Blog1961 (12) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... r lands are situate in Hosdrug and kasargod Taluks which have now been made part of the Cannanore District in the State of Kerala. They hold large areas of lands, the major part of which is held by them as ryotwari parradars, of Madras under the Board's Standing Orders of that State. In these lands they have areca and pepper plantations besides rubber plantation. They also grow other crops on some of the lands. The Act is being attacked on the ground that it contravenes Arts. 14, 19 and 31 of the Constitution. Besides this, it is also contended on behalf of the petitioners that the Bill which became the Act lapsed under the provisions of the Constitution, and therefore the assent given to the Bill by the President was of no effect and did not result in the Bill becoming an Act. We do not think it necessary to set out the details of the attack on this last score in the present petitions as the matter has been considered in full in the judgment in the connected Writ Petition No. 105 of 1961. The petitioners further submit that their lands which they hold as ryotwari pattadars are not estates within the meaning of Art. 31A (2)(a) of the Constitution and therefore the Act so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le legislation and the State Legislature was competent to enact the Act under item 18 of List II and item 42 of List III of the Seventh Schedule and there is no acquisition of money by the state under the Act and reference is made to s. 80 of the Act in this connection; and lastly, that the discrimination alleged with respect to plantations, the fixation of ceiling and the deductions from compensation payable under Chapters II and III is really no discrimination at all and the provisions in that behalf are based on an intelligible differentia which is in accordance with the object and purpose of the Act. Re. (1). The question whether the Bill which finally received the assent of the President on January 21, 1961, had lapsed because the legislative assembly which originally passed it was dissolved and a new legislative assembly which came into being after the general elections reconsidered and re-passed it under Art. 201 of the Constitution has been considered by us in Writ Petition No. 105 of 1961, judgment in which has just been delivered and it has been held there that the bill did not lapse and therefore it validly became law when the President assented to it. The attack o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase price payable by the tenant under s. 45 and from the market value before compensation is arrived at for payment to the land owner under s. 52 and to the person surrendering excess land under s. 64. But if one looks at the purpose and object of the Act it will be clear that the main provisions of the Act are clearly within the legislative competence of the State legislature under item 18 of List II and item 42 of List III. The scheme of the Act so far as Chap. II dealing with extinction of the land- owner's right is concerned is that the land- owner's right vested in the State under ss. 41 and 42 on a day to be notified by the Government in that behalf. Thereafter, s. 43 provides that cultivating tenants of the lands which have vested in the State shall have a right to assignment of the right, title and interest so vested in the State on payment of a certain price which is calculated under s. 45 and is called the purchase price. After the purchase price is determined, the compensation to be paid to the land-owner is provided by s. 52 and there is reduction in the purchase price for the purpose of given compensation. It is however obvious that the object of Chap. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided by the law is not adequate: See Art. 31(2). It is only because the compensation provided under s. 52 is a percentage of the purchase price as calculated unders. 45 that it appears as if the State is taking away a part of the compensation due to the landowner. Section 52 is however only a method for determining compensation and the whole compensation due to the land-owner is to be found in s. 52 and it cannot therefore be said that any part of the compensation is being taken away by the State. Similarly the scheme of Chap. III which provides a ceiling is that any land in excess of the ceiling shall vest in the Government under s. 62. Thereafter the land so vested in Government can be assigned under s. 70 to persons who do not possess any land or possess land less than 5 acres of double crop nilam or its equivalent. It is true that Government may assign the lands to those who apply under s. 70but it is not bound to do so and here again there will be a time lag between the vesting of the excess land in the Government under s.62 and its assignment to those who are eligible unders. 70. The charge that in this Chapter there is a device for taking away the compensation due to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is provided ins. 52 and s 64. The adequacy of that compensation cannot be challenged in view of Art. 31(2), and there is therefore no justification for saying that the money due to the landowner or the person from whom the excess land is acquired is being taken away by the State. That argument would only be possible if the compensation was the whole amount arrived at unders. 45 or under s. 72 and from that the Government deducted money due to the landowner. That however is not so and the compensation to which the landowner or the person from whom the excess land is acquired is to be found only in ss. 52 and 64 and there is thus no question of taking away any money due to the landowner. Further, whatever unfairness might appear because of the difference between ss. 45 and 52 on the one hand and ss. 64 and 72 on the other and the manner in which the compensation is shown as a percentage of the purchase price or the market value is removed by the provision in s. 80 of the Act. That section provides for the constitution of an agriculturist rehabilitation fund in which the surplus, if any, of the purchase price after the disbursement therefrom of the compensation is to be put along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and therefore even the apparent result of the difference between ss. 45 and 62 and ss 64 and 72 is taken away by the constitution of the fund under s. 80, and it cannot be said at all under the circumstances that any device has been employed in the Act to take away the moneys of the landowners or the persons from whom excess land is taken away for the purpose of adding to the revenue of the State. We are therefore of opinion that the Act cannot be struck down as a colourable piece of legislation which is beyond the competence of the State Legislature. Re. (3). Article 31A was inserted in the Constitution by the Constitution (First Amendment) Act, 1951, with retrospective effect so that it must be deemed to have been in the Constitution from the very beginning, i.e., January 26, 1950. The article was further amended by the Constitution (Fourth Amendment) Act, 1955 which was also made retrospective and therefore Art. 31A as it stands today must be deemed to have been part of the Constitution right from the start, i.e., January 26, 1950. We are not concerned in the present petitions with cl. (1) of Art. 31A, which was extensively amended in 1955 but only with cl. (2). Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raiyat were added in sub-cl. (b) in 1955, it was further enumeration within a class already there; further as held in The State of Bihar v. Rameshwar Pratap Narain Singh, their inclusion in the circumstances and in the particular setting showed that the words or other intermediary did not necessarily qualify or colour the meaning to be attached to these new tenures. The meaning of the word estate has however to be found insub-cl. (a) and it is the words used in that sub- clause only which will determine its meaning irrespective of whether any intermediary existed in an estate or not. The meaning of the word estate in sub-cl (a) is the same as it might be in the existing law relating to land-tenure in force in a particular area. Where therefore there is an existing law in a particular area in which the word estate as such is defined the word would have that meaning for that area and there is no necessity then for looking for its local equivalent. But if in existing law of a particular area the word estate as such is not defined, but there is a definition of some other term which in that area is the local equivalent of the word estate then the word estate would have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such in s. 3(2) and when the Constitution came into force the relevant part of the definition was as follows:- Estates' means:- (a) any permanently settled estate or temporarily settled zamindari; (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that subsequent to the grant, the village has been partitioned among the grantees or the successors-in title of the grantee or grantees. This Act applied to the entire Presidency of Madras except the Presidency town of Madras, the district of Malabar and the portion of the Nilgiri district known as South East Wynaad. It thus applied to the district of South Canara from where these petitions come. So far therefore as the District of South Canara was concerned, there was an existing law which defined the word estate for that local area. Shortly before the Constitution came into force the Madras legislature had passed the Madras Estates (Abolition and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1908 dealt with landlord tenures of Madras and was an existing law relating to land-tenures. The other class of land-tenures consisted of ryotwari pattadars which were governed by the Board's Standing Orders, there being no Act of the legislature with respect to them. The holders of ryotwari pattas used to hold lands on lease from Government. The basic idea of ryotwari settlement is that every bit of land is assessed to a certain revenue and assigned a survey number for a period of years, which is usually thirty and each occupant of such land holds it subject to his paying the land-revenue fixed on that land. But it is open to the occupant to relinquish his land or to take new land which has been relinquished by some other occupant or become otherwise available on payment of assessment, (see Land Systems of British India by Baden-Powell, Vol. III, Chap. IV, s. II, p. 128). Though, theoretically, according to some authorities, the occupant of ryotwari land held it under an annual lease (see Macleane, Vol. I Revenue Settlement, p. 104), it appears that in fact the Collector had no power to terminate the tenant's holding for any cause whatever except failure to pay the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the ryotwari system into South Canara, no distinction now exists between the wargadar, the mnulawargadar and kudutaledar and they are all ryotwari pattadars Therefore, when the Constitution came into force the ryotwari pattadars of South Canara were on the same position as the ryotwari pattadars of the rest of the State of Madras. Further, as the Act of 1908 was in force in South Canara also, though there may not be many estates as defined in that Act in this area it follows that in this area also the word estate would have the same meaning as in the Act of 1908 and therefore ryotwari pattadars and their lands would not be covered by the word estate . Further, there can be no question of seeking for a local equivalent so far as this parts of the State of Kerala which has come to it from the former State of Madras is concerned. We are therefore of opinion that lands held by ryotwari pattadars in this part which has come to the State of Kerala by virtue of the States Reorganisation Act from the State of Madras are not estates within the meaning of Art. 31A (2)(a) of the Constitution and therefore the Act is not protected under Art. 31A (I) from attack under Arts. 14, 19 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s defined in the Explanation to s. 59(2). The contention on behalf of the petitioners is that there is no reason why the same benefits which have been conferred on plantations as defined in the Act should not be conferred on those who hold areca and pepper plantations, and that there are no intelligible differentia which would justify the State legislature in treating the pepper and areca plantations differently from rubber, tea and coffee plantations. Article 14 has been the subject of consideration by this Court on a number of occasions and the principles which govern its application have been summarised in Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar, in these words:- (a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have to be granted from the ceiling in order that production may not suffer. This was considered in the Second Five Year Plan at p. 196 and three main factors were taken into account in deciding upon exemptions from the ceiling, namely:- (1) integrated nature of operations, especially where industrial and agricultural work are undertaken as a composite enterprise, (2) specialised character of operations, and (3) from the aspect of agricultural production the need to ensure that efficiently managed farms which fulfil certain conditions are not broken up. Bearing these criteria in mind it was recommended in the Second Five Year Plan (see p. 196) that the following categories of farms may be exempted from the operation of ceiling namely: (1) tea, coffee and rubber plantation; (2) orchards where they constitute reasonably compact areas; (3) specialised farms engaged in cattle breeding, dairying, wool raising etc; (4) sugarcane farms operated by sugar factories; and (5) efficiently managed farms which consist of compact blocks, on which heavy investment or permanent structural improvements have been made and whose break- up is likely to lead to a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and it is here that the finest and the best organised pepper plantations in India exist. Some of the largest plantations among them have an area of a 100 to 150 acres. Pepper vines commence yielding usually from the third year, the yield increasing gradually until the vines come to full bearing in about ten years. The economic life of a vine varies from place to place. From the tenth to the 25th year, the vines are in full bearing, and the yield begins to decline after the 30th year. The initial outlay on pepper plantations is heavy and the pepper crop requires continuous attention and care. The total area under pepper is over 2 lakhs acres out of which about 20,000 acres are under pure pepper plantations. The initial expenditure on laying out a pepper plantation can be recovered only after several years and the best organised and most extensive pepper plantations of India are in the Hosdrug taluk, South Canara (from where these petitions come) and North Malabar. This information taken from Farm Bulletin 55 shows that in the last fifty years pepper in India has reached the plantation stage and in particular in Hosdrug taluk from where these petitions come there are the bes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Sub-committee came up for consideration before the Indian Central Arecanut Committee on January 23, 1958, and was accepted. Thus these proceedings show that fixation of ceiling on arecanut gardens would hamper production which would be detrimental to national economy. It is in this background therefore that we have to consider whether the non-inclusion of areca and pepper plantations in the definition in s. 2(39) with the result that areca and pepper plantations do not enjoy similar benefits as others, is discriminatory. From what we have said above it has not been shown that there is any appreciable difference between the economics of tea, coffee and rubber plantations and areca and pepper plantations. It is true that plantations in areca and pepper are not so widespread as tea, coffee and rubber plantations but it is equally true that in this particular area from which these petitions come areca and pepper plantations are very common. The fact however that areca and pepper plantations are very common only in this area of the State of Kerala is no reason for treating them differently from tea, coffee and rubber plantations which are apparently more evenly distributed thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scale plantations of pepper in these regions, and if prices go down for below this level, large scale pepper plantations may have even to be abandoned. This does not afford a sufficient basis for holding that 10 acres is the optimum holding for a pepper plantation. In the first place, it is mentioned at p. 8 of the bulletin that pepper began to be grown on plantation scale when the price rose to about ₹ 700/- per candy in 1928. Therefore even if the price falls below ₹ 1,500/- to ₹ 2,000/- per candy there is no reason why pepper cultivation on a plantation scale should become impracticable, particularly as it is unlikely that the cost of only pepper will fall and not all other commodities. At p. 72 the bulletin mentions that the cost of cultivation of pepper can be brought down only if the general price level is brought down substantially. Now there is no reason to suppose that there would be a catastrophic fall in the price level of pepper only which would make all pepper plantations above 10 acres uneconomic and unprofitable. In any case this is not the reason urged on behalf of the State in support of not including pepper plantations in the definition of plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 9 and 14 we find that out of the total number of registered estates more than 4,500 are between 5 acres and 25 acres while only about 2,200 estates are above 25 acres. Further there are more than 24,000 estates below 5 acres. Similarly at p. 97, Chap. XI, Part III of the Report dealing with rubber, out of the total of over 26, 709 rubber estates, 23,300 are up to 5 acres, 1,900 up to 10 acres and only about 1,500 above 10 acres. So it appears that the large majority of plantations whether they be of coffee or rubber are below 10 acres and that is also the case with area and pepper plantations. Thus there is no reason for giving preference to plantations of tea, coffee and rubber over plantations of area and pepper for the conditions in the two sets of plantations whether for the purpose of ceiling under Chap. III or for the purpose of acquisition of landowners' rights under Chap. II are the same. The reasons therefore which call for exemption of tea, coffee and rubber plantations equally apply to areca and pepper plantations and there is no intelligible differentia related to the object and purpose of the Act which would justify any distinction in the case of tea, coffee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which does not conform to any of the three kinds of families prevalent in the State. Turning now to s. 58, the ceiling has been fixed in two ways. The first is by reference to a family as defined in the Act of not more than five members which is allowed 15 acres of double crop nilam or its equivalent with an addition of one acre of double crop nilam or its equivalent for each member in excess of five, so however that the total extent of the land shall not exceed 25 acres of double crop nilam or its equivalent. The second is by reference to an adult unmarried person who is allowed 7.50 acres of double crop nilam or its equivalent. It has been urged on behalf of the State that the provisions as they stand do not make any discrimination whatsoever for there is the same provision for all adult unmarried persons and the same for all families as defined in the Act. This in our opinion is an over-simplification of the provision relating to ceiling under s. 58. On an argument of this kind no provision would ever be discriminatory for it is unlikely that a provision would on the face of it make a discrimination. The discriminatory nature of the provision has to be judged from the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quences that follow from the provisions of s. 58(1). We are therefore of opinion that s. 58(1) is violative of the fundamental right enshrined in Art. 14; as that section is the basis of entire Chap. III the whole Chapter must fall with it. This would be an additional reason why Chap. III should be struck down as violative of Art 14 in its application to ryotwari landas which have come to the State of Kerala from the State of Madras. Re. (6) It is contended that the manner in which the compensation is cut down progressively in ss. 52 and 64 of the Act is violative of Art. 14. The Compensation payable under s. 52 is determined in this manner. First the purchase price is arrived at under s. 45. Thereafter s. 52(2)(b) provides that the landowner or the intermediary, except in the case of religious, charitable and educational institution of a public nature, would be entitled to compensation. The compensation would consist of (1) the value of structures, wells and embankments of a permanent nature situated in the land and belonging to the landowner or the intermediary, as the case may be, and (2) the percentage of the value of interest of the landowner or the intermediary in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f compensation and unless the cut was so large as to make the compensation illusory the cut may be protected by Art.31(2). But in the present case there is not a uniform cut on the purchase price or the market value for all persons, the cut is higher as the purchase price or the market value gets bigger and bigger after the first slab of ₹ 15,000/-. This difference in cut in being justified on behalf of the State on the same principle on which (for example) the slab system exists for purposes of income-tax. We are however of opinion that there is no comparison between the slab system of income-tax rates and the present cuts. Taxation is a compulsory levy from each individual for the purpose of the maintenance of the State. We may therefore reasonably expect that a rich man may be required to make a contribution which may be higher than what may be proportionately due from his income for that purpose as compared to a poor man. This principle cannot be applied in a case where a person is deprived of his property under the power of eminent domain for which he is entitled to compensation. There is no reason why when two persons are deprived of their property one richer than the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n due to greater interest of the cultivator in the soil. But these objects have no rational relation which would justify the making of different cuts from the purchase price or the market value for the purpose of giving compensation to those whose interests are being acquired under the Act. We can therefore see no justification for giving different compensation based on different cuts from the purchase price or the market value as provided in ss. 52 and 64 of the Act. We may in this connection refer to Kameshwar Singh v. The State of Bihar, in which similar question with respect to compensation provided in the Bihar Land Reforms Act, 1950, came up for consideration. There the Act provided compensation at different rates depending upon the net income. The landowner having the smallest net income below ₹ 500/- was to get twenty times the net income as compensation while the landowner having the largest net income, i. e., above 1,00,000/- was to get only three times of the net income. Intermediate slabs provided different multiples for different amounts of net income. That provision was struck down by the Special Bench of the Patna High Court as violative of Art. 14. It may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f compensation to those whose interests are acquired. It also provides for a mode of valuation of these interests. Then it provides by ss. 52 and 64 for payment of compensation at a progressively smaller rate for larger valuations. For the higher slabs in the valuation made as provided by the Act, less and less is paid by way of compensation. It is said that these provisions for progressively diminishing compensation are discriminatory and unconstitutional. This is the first point with which I propose to deal. The question is whether the payment of compensation at a progressively smaller rate as the valuation is higher offends Art. 14 of the Constitution. Now it is not disputed that progressively higher rate of taxation by an Act taxing income is not unconstitutional. I think such taxation is too well recognised now to be challenged. If that is so-and that was the basis on which arguments proceeded in this case-I am unable to see that a statute providing for acquisition of property and for payment of compensation at a progressively lower rate for the higher slabs of valuation can be unconstitutional. The reason for progressive taxation in the case of inheritance taxes and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to be so in the case of an Income-tax Act. The next question on which I wish to say a few words concerns those provisions of the Act which exempt plantations of tea, coffee, rubber or cardamom or such other kinds of special crops as the Government may specify, from certain provisions of the Act. Plantations have been defined in s. 2(39) of the Act as land used by a person principally for the cultivation of tea, coffee, rubber or cardamom or other notified crops. No other crop appears to have been notified yet. Section 58 of the Act provides the ceiling area of land which may be held by any individual proprietor. Land above the ceiling has to be surrendered to the Government. Section 57 of the Act provides that this provision would not apply to plantations as defined ins. 2(39). Again, Ch. 2 of the Act which gives the tenants the right to purchase land from the landlords and vests in the Government the lands of the landlords not themselves cultivating them above the ceiling fixed, is by s. 3 (viii) not made applicable to plantations exceeding thirty acres in extent. The question is whether the benefit so given to the plantations as defined in the Act is discriminatory. The pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... size of the plantations. Therefore, there is no point in saying that areca and pepper are not grown on a plantation scale. For these reasons I think the provisions in the Act making a discrimination in favour of tea, coffee, rubber and cardamom plantations cannot be upheld. For the same reason, I think the discriminatory treatment made in favour of cashew plantation also cannot be sustained. Sections 3(viii), 57(1)(d) and 59(2) of the Act are therefore, in my opinion, invalid. I think however that these provisions are severable from other parts of the Act. I think it cannot be reasonably said that the legislature would not put the Act into operation if these provisions are taken out of it. The deletion of the provisions does not further make it impossible for the rest of the Act to operate. I am, therefore, unable, to hold that because the sections mentioned above are bad, the whole Act should be declared to be bad. That is all I wish to say in this judgment. With regard to the other matters arising in this case, I agree with the judgment delivered by Wanchoo J. AYYANGAR, J.- I entirely agree with the order that the petitions should be allowed and the impugned Act struck ..... X X X X Extracts X X X X X X X X Extracts X X X X
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