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TMI Blog2009 (10) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the community are so distributed as best to subserve the common good. The Directive Principles of State policy contained under Part IV of the Constitution of India had attained a different significance and legal stature of the Directive Principles was uplifted by the 25th Amendment Act, 1971 of the Constitution. Article 31C of the Constitution states that, notwithstanding anything contained in Article 13, no law giving effect to the policy of the State towards securing all or any of the principles laid down in Part IV shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution, and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy. Article 39 of the Constitution places an obligation upon the State under Clauses (b) and (c) to ensure and appropriately control the distribution and ownership of material resources available to the community. The Act, therefore, was intended to unequivocally declare the State policy towards securing principles sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inter alia concerned with the challenge to the definition of the 'family unit' and lowering of the limit. They came to be disposed of by a judgment of this Court in the case of Vithalrao Udhaorao Uttarwar v. The State of Maharashtra AIR 1977 Bom. 99. However, as a result of oversight, some matters were not listed before the Court and they came up for hearing before another Division Bench. The Division Bench hearing other group of the matters at Nagpur found that they were unable to agree with the conclusions reached by the Division Bench at Bombay. In fact, the Judges presiding over the Division Bench differed with each other on the question of extra territorial jurisdiction. The judgment of the Court in Vithalrao's case (supra) was challenged before the Supreme Court but in that Petition, the question of extra territoriality of the ceiling provision had not been raised. In these circumstances, the matter was placed before the Full Bench on the issue whether the question should be determined by the Full Bench itself or the matter needs to be referred to a 3rd Judge as a member of the Division Bench at Nagpur had differed on certain basic issues, therefore, the Full Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish such particular of land held by him, if any, in any other part of India to any Tahasildar" should also be declared beyond the competence of State Legislature. If these provisions are struck down as beyond the competence of the State Legislature, as they have the effect of operating extraterritorially, there is no other challenge before us so far as the Ceiling Act is concerned. 5. Thus, the Full Bench settled the position of law as far as this Court is concerned in the year 1980, whereafter certain cases had been decided by different Benches of this Court following the law enunciated by the Full Bench. 6. One Murarao Malojirao Ghorpade instituted suit for declaration that the order passed in Ceiling Case No. 43A and as confirmed by the Chairman Surplus Land Determination Tribunal was bad, illegal, null and void, without jurisdiction and inoperative for different reasons and particularly inter alia that the judgment of the Full Bench of this Court in Shankarrao's case (supra) was the foundation of the suit. The suit was decreed in favour of the Plaintiff. The Appeal filed by the State (Civil Appeal No. 46 of 1984) also came to be dismissed vide judgment of the 3rd Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra did not have legislative competence to decide about the holdings of a person in areas other than the State of Maharashtra. As a consequence it was held that the explanation to Sub-section (2) of Section 3 is unlawful and inoperative and beyond the competence of the State Legislature. The last sentence in Sub-section (1) of Section 43A of the Act, requiring a person to furnish particulars of the land held by him in other parts of India to the Tehsildar was also declared to be beyond the competence of the State Legislature. While so holding the Full Bench considered similar provisions in the State of Gujarat and other adjoining states. The Court observed that the Agricultural Ceiling Acts of Gujarat and Maharashtra are similar and on par, whereas the Madhya Pradesh and Andhra Pradesh Acts, although similar do not take cognisance of holdings of agricultural lands by the holders in any other part of India. 3. The Supreme Court in the case of Shrikant Bhalchandra Karulkar and Ors. (supra), was dealing with the Gujarat Agricultural Land Ceiling Act, 1960. The Supreme Court observed that in view of the provisions of Article 245 and 246 of the Constitution of India, the State Legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erritorial. This is because in pith and substance, the law remains a legislation, imposing the ceiling on holding of land within the State, under the Entry 18 List II r/w Entry 42 List III, 7th Schedule of the Constitution of India. 5. The learned Counsel for the appellants herein submits that in view of the ratio in the case of Shrikant Bhalchandra Karulkar (supra), the decision of the Full Bench would no longer be a good law. It is submitted that the observations of the Full Bench judgment in the case of the Shankarrao (supra), would have to be revisited especially in light of para 9 of the judgment in Shrikant Bhalchandra Karulkar (supra). Para 9 reads as under: 9...It is obvious that the provisions of Section 6(3A) of the Act and Section 3(2) of the Bombay Act are entirely different. On the plain reading of Section 3(2) of the Bombay Act it is patent that the Maharashtra Legislature was making law in respect of the land held by a person anywhere in India. The expression "all land held by a person or as the case may be by a family unit whether in this part of the Maharashtra Legislature to make extraterritorial law. No assistance can, thus, be taken by the learned Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. As no question of reference to be answered by this Bench has been formulated by the learned Single Judge vide order dated 28th July, 2009, we would like to prefer to state broadly the matters in issue before this Bench: (a) What is the scope of an order of reference and whether the order of reference was called for in view of the Judgment of the Supreme Court in the case of Shrikant Bhalchandra Karulkar and Ors. v. State of Gujarat 1994(5) SCC 459. (b) How the law declared by the Full Bench of this Court could be construed in light of the judgment of the Supreme Court and what will be its effect and consequences; (c) Whether the judgment of this Bench would relate back to the date of earlier decision of the Full Bench or will be given effect prospectively in view of the fact that the Full Bench had declared the provisions of Section 43A(1) of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 as ultra vires. 8. From paragraph 4 of our order dated 26th August, 2009, it necessarily follows that the first and foremost question to be considered by us relate to the law of precedents and judicial propriety. 9. Salmond on Jurisprudence discusses in some detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Court has really been determined. This underlying principle which forms the only authoritative element of a precedent is often termed the ratio decidendi." It is by the choice of material facts that the Court create law. The law so created would be a good precedent for similar subsequent cases unless it falls within the exceptions hereinafter indicated. 7. The doctrine of precedent relates to following of previous decisions within its limitations. It introduces the concept of finality and adherence to the previous decisions and while attaining it, it creates consistency in application of law. The later judgment should be similar to the earlier judgment, which on material facts are the same. Finding ratio decidendi is not a mechanical process but an art which one gradually acquires through practice. What is really involved in finding the ratio decidendi of a case is the process of abstraction. Ratio decidendi is a term used in contrast to obiter dictum which is not necessarily binding in law. According to Sir John Salmond, "a precedent is a judicial decision, which contains in itself a principle. The only principle which forms its authoritative element is often ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endi". In contrast with the "ratio decidendi" is the "obiter dictum". "Obiter dictum" is a mere saying by the way, a chance remark, which is not binding on the future Courts, though it may be respected according to reputation of the Judge, the eminence of the Court and the circumstances in which it came to be pronounced. The reason for not regarding an "obiter dictum" as binding is that it was probably made without a full consideration of the case on the point, and that, if very broad in its terms, it was probably made without a full consideration of all the consequences that may follow from it; or the judge may not have expressed a concluded opinion. ( Ref : Paper submitted in Third Workshop of 2005 on the Subject of Law of Precedents and appropriate use of case law in Court working by U.B. Shukla.) 12. In light of the above, now let us examine some judgments of the Supreme Court which have some bearing on the issue before us. In the case of Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel and Ors. AIR 1968 SC 372 the Supreme Court examined the question as to when a reference can be made to a Full Bench and whether mere irre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there are conflicting decisions of the same Court, or there are decisions of other High Courts in India which are strongly persuasive and take a different view from the view which prevails in his or their High Court, or that a question of law of importance arises in the trial of a case, the Judge or the Bench passes an order that the papers be placed before the Chief Justice of the High Court with a request to form a special or Full Bench to hear and dispose of the case or the questions raised in the case. For making such a request to the Chief Justice, no authority of the Constitution or of the Charter of the High Court is needed, and by making such a request a Judge does not assume to himself the powers of the Chief Justice. A Single Judge does not by himself refer the matter to the Full Bench: he only requests the Chief Justice to constitute a Full Bench for hearing the matter. Such a Bench is constituted by the Chief Justice. The Chief Justice of a Court may as a rule, out of deference to the views expressed by his colleague, refer to the case; that does not mean, however, that the source of the authority is in the order of reference. Again it would be impossible to h old that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Court in the case of Tribhovandas Purshottamdas Thakkar v. Ratilal Motilal Patel AIR 1968 SC 372 while dealing with a case in which a Judge of the High Court had failed to follow the earlier judgment of a larger Bench of the same Court observed thus: The judgment of the Full Bench of the Gujarat High Court was binding upon Raju, J. If the learned Judge was of the view that the decision of Bhagwati, J., in Pinjare Karimbhai case (1962) 3 Guj LR 529 and of Macleod, C.J., in Haridas case AIR 1922 Bom 149(2) did not lay down the correct law or rule of practice, it was open to him to recommend to the Chief Justice that the question be considered by a larger Bench. Judicial decorum, propriety and discipline required that he should not ignore it. Our system of administration of justice aims at certainty in the law and that can be achieved only if Judges do not ignore decisions by courts of coordinate authority or of superior authority. Gajendragadkar, C.J., observed in Bhagwan v. Ram Chand AIR 1965 SC 1767: It is hardly necessary to emphasise that considerations of judicial propriety and decorum require that if a learned Single Judge hearing a matter is inclined to take the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of its undoubted inherent and plenary powers to do complete justice, keeping aside even technicalities, the High Court, exercising statutory powers under the criminal laws of the land, could not afford to assume to itself the powers or jurisdiction to do the same or similar things. The High Court and all other courts in the country were no doubt ordained to follow and apply the law declared by this Court, but that does not absolve them of the obligation and responsibility to find out the ratio of the decision and ascertain the law, if any, so declared from a careful reading of the decision concerned and only thereafter proceed to apply it appropriately, to the cases before them. Considered in that context, we could not find from the decisions reported in Sukumaran and Santosh Kumar any law having been declared or any principle or question of law having been decided or laid down therein and that in those cases this Court merely proceeded to give certain directions to dispose of the matter in the special circumstances noticed by it and the need felt, in those cases, by this Court to give such a disposal. The same could not have been mechanically adopted as a general formula to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r v. Goodrich (1955) 2 All ER 530 (All ER at p.332 H1), where Lord Denning observed: When the judges of this Court give a decision on the interpretation of an Act of Parliament, the decision itself is binding on them and their successors: see Cull v. IRC (1939) 3 All ER 761; Morelle Ltd. v. Wakeling (1955) 1 All ER 708. But the words which the judges use in giving the decision are not binding. This is often a very fine distinction, because the decision can only be expressed in words. Nevertheless, it is a real distinction which will best be appreciated by remembering that, when interpreting a statute, the sole function of the court is to apply the words of the statute to a given situation. Once a decision has been reached on that situation, the doctrine of precedent requires us to aply the statute in the same way in any similar situation; but not in a different situation. Wherever a new situation emerges, not covered by previous decisions, the courts must be governed by the statute and not by the wordsw of the judges. 21. The Supreme Court in the case of Bharat Petroleum Corpn. Ltd. v. Mumbai Shramik Sangh and Ors. (2001) 4 SCC 448 held as under: 2. We are of the view that a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial discipline, consistency and certainty in judicial decisions to advance the doctrine of finality. The Full Bench Judgment of this Court in Shankarrao's case (supra) as well as the judgment of the Supreme Court in Shrikant Karulkar's case (supra) were before the learned Single Judge. As already noticed, the Supreme Court in the case Delhi Administration v. Manoharlal (supra), had observed that the High Court and all other courts in the country were no doubt ordained to follow and apply the law declared by this Court, and responsibility to find out the ratio of the decision and ascertain the law, if any, so declared from a careful reading of the decision concerned and only thereafter proceed to apply it appropriately, to the cases before them. Therefore, in our humble view, the appropriate course of action that the learned Single Judge ought to have taken was to decide the case in light of the law stated in the aforesaid two judgments, if in the opinion of the learned Single Judge the law stated by the Full Bench was not a good law in view of the judgment of the Supreme Court, the judgment of the Supreme Court being that of the superior Court and in terms of Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court in the case of Shankarrao's (supra) which was duly considered by the Supreme Court and upon discussion the findings were recorded in paragraph 9 of the judgment. In other words, a point was raised, argued and entertained by the Supreme Court with direct reference to the question for consideration before that Court and the reasoned findings were recorded. Quantitative and qualitative value of the findings recorded by the superior Court cannot be a matter of consideration before a Court as the judgment of the Supreme Court is binding in terms of the Constitutional mandate on all other Courts. Thus, we must accept the judgment of the Supreme Court to the facts and circumstances of the case before us in its appropriate perspective. KEEPING IN VIEW THE PROVISIONS OF THE MAHARASHTRA ACT, HOW THE LAW DECLARED BY THE FULL BENCH IS TO BE CONSTRUED IN LIGHT OF THE JUDGMENT OF THE SUPREME COURT: 26. At the very outset, it will be important for us to examine the provisions of Section 3(2) of the Maharashtra Act. Section 3(2) of the Maharashtra Act reads thus: 3(2) All the land held by a person, or as the case may be, a family unit whether in this State or any other part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and inevitable result is that the judgment of the Full Bench of this Court has been accepted by the parties and now for all these 28 years, the said judgment has remained in force. Large number of cases have been dealt with and disposed of by this Court in terms of law enunciated by the Full Bench of this Court. 28. Both the parties before us had relied upon and referred to the judgment of the Supreme Court in the case of Shrikant Karulkar (supra). In that case, the Supreme Court was considering the provisions of Section 6(3A) of Gujarat Agricultural Land Ceiling Act, 1960 (hereinafter referred to as the "Gujarat Act"). In order to avoid any ambiguity, we consider it appropriate to reproduce the said provision at this juncture itself. Section 6(3A) of the Gujarat Act reads thus: 6(3A) Where any person hold any land in any other part of the India outside the State, then, the area of land so held by him in such other part, not exceeding the maximum area of land, which such person is entitled to hold in such other part of India under any law, if any, relating to ceiling on land, used or capable of being used for agricultural purposes, shall be excluded from the ceiling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 245 and 246 of the Constitution of India the Legislature of a State can make laws for the State or any part thereof. It would be overstepping the limits of its legislative field when it purports to affect men and property outside the State. In other words the State Legislature has no legislative competence to make laws which have extraterritorial operation. Meaning of the words "extraterritorial operation" have been authoritatively laid down by this Court in various judgments. A State Legislature has plenary jurisdiction to enact laws in respect of subjects in Lists II and III, Seventh Schedule, Constitution of India. Such laws may be in respect of persons with in the territory, of property immovable or movable situated within the State, or of acts and events which occur within its borders. So long as the law made by the State Legislature is applicable to the persons residing within its territory and to all things and acts within its territory, it cannot be considered extraterritorial. This Court over a period of three decades has evolved a principle called "doctrine of territorial nexus" to find out whether the provisions of a particular State law have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eiling on holding of land within the State under Entry 18, List II, read with Entry 42, List III, Seventh Schedule, Constitution of India. Mere consideration of some factors which exist outside the State, for the purpose of legislating in respect of the subject for which the legislature is competent to make law, would not amount to extraterritorial legislation. Such considerations are part of the plenary legislative function of the State Legislature. The legislative entries not only indicate the subjects for the exercise of legislative power but their scope is much wider in the sense that they specify a field for legislation on the subject concerned. Therefore, when a statute fixes a ceiling on agricultural land holding within the State, it would not become extraterritorial simly because it provides that while determining the permissible area of a person under the said statute the land owned by him outside the State is to be taken into consideration. We are, therefore, of the view that the impugned provisions are within the legislative competence of the State Legislature and have been validly enacted. 9. The learned Counsel for the appellants have placed reliance on the Full Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which fixes ceiling on an agricultural land holding within the State, would not become extra territorial simply because it provides that while determining the permissible area of a person under the said Statute the land owned by him outside the State is to be taken into consideration. Thus, it was held that Section 6(3A) of the Gujarat Act does not have extra territorial operation and the appeal preferred by the land owners was dismissed; (b) the Supreme Court noticed the provisions of Section 3(2) of the Maharashtra Act and specifically held in paragraph 9 that the provisions of Section 6(3A) of the Gujarat Act and Section 3(2) of the Maharashtra Act are entirely different; (c) The supreme Court specifically held that the expression "all land held by a person, or as the case may be, by a family unit whether in this State or any other part of India..." clearly indicated the intention on the part of the Maharashtra Legislature to make extra territorial law. The above dichotomy of the findings clearly shows that the view taken by the Full Bench of this Court was specifically noticed by the Supreme Court with approval. The provisions of the Maharashtra Act were found to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cidendi of a case observed that the only thing in a Judge's decision binding as an authority upon a subsequent Judge is the principle upon which the case was decided. The ratio decidendi of a decision may be narrowed or widened by the Judges before whom it was cited as a precedent. In the process, the ratio decidendi which the judges who decided the case would themselves have chosen may be even different from the one which has been approved by subsequent judges. Therefore, that is binding. 34. Now we will proceed on the basis that, as noticed by the Supreme Court, the provisions of the Maharashtra and Gujarat Act are entirely different. A bare reading of the provisions of the Gujarat Act shows that any land which any person is entitled to hold in such other part of India outside the State under the law, if any, relating to ceiling on land, shall be excluded from the ceiling area in excess to which a person is not entitled hold a land under those provisions and the extent of land determined after so excluding such area shall in relation to such person, be deemed to be ceiling area, held by him in the State of Gujarat. Therefore, the provisions of the Gujarat Act contemplates &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as set aside the reasons recorded by the Full Bench (Shankarrao's case) while declaring the part of provisions of Section 3(2) as extraterritorial. On the contrary, the Supreme Court itself has come to a definite conclusion that the provisions of the Maharashtra Act are extraterritorial and therefore, the question of legislative competence would hit the provisions. In the light of these findings, the judgment of the Full Bench can hardly be faulted with except to the extent we have specifically noticed. The determination of land holding has to be examined and the calculations as to surplus must be made in terms of provisions of Section 3(2) while ignoring the offending expressions used by the Legislature in that provision. Interestingly, notice can be taken of another judgment of the Supreme Court in Tatoba Bhau Savagave (dead) by LRs. and Anr. v. Vasantrao Dhindiraj Deshpande and Ors. (2001) 8 SCC 501 where the Supreme Court was considering the provisions of Section 43(1B) of the Bombay Tenancy and Agriculture Lands Act, 1948, in relation to the land owner who was a member of the Armed Forces claiming exemption to the extent of his share in certain lands held by the tenants. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the land in Karnataka was affirmed. Thus, the absence of specific provision was found to be the basic infirmity in the actions of the respondents while in the present case the provisions of Section 3(2) of the Maharashtra Act as enacted suffer from excessive legislation. The State Legislature has no powers to enact laws which will have real and effective impact on the property situated in another State. The section to that extent has extraterritorial operation and is not protected by the doctrine of territorial nexus and therefore, necessarily has to be quashed. The Supreme Court and the Full Bench of this Court have clearly stated the law that the provisions of Section 3(2) of the Maharashtra Act to the extent mentioned in Full Bench judgment in Shankarrao's case are beyond legislative competence of the State Legislature. CONCLUSIONS 39. Since we were of the considered view that the findings recorded by the Supreme Court in para 9 of the judgment in the case of Shrikant Karulkar (supra) has the force of "ratio decidindi" to be followed by us in the present case, we felt it unnecessary to discuss in detail the principle of statutory interpretation in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o approve the finding recorded by the Full Bench (Shankarrao's case) that the provisions of the Maharashtra Act and the Gujarat Act are "on par" or similar. These observations cannot hold the field primarily for the reason that the Supreme Court in the case of Shrikant Karulkar (supra) has returned the finding that these provisions are "entirely different". The distinction between the provisions is not a fine one but there is a markable difference in language and its consequential effect in law. In the Maharashtra Act, there is not merely a reference to the land held in other State but in fact, all the land held by a person or a family unit whether in the State of Maharashtra or any other part of India in excess of ceiling area by deeming fiction of law becomes the surplus land. As per the explanation provided to Section 3(2) in calculating the ceiling area to be held in Maharashtra State and determining "surplus land", the area of land in any part of India shall be taken into consideration. Considering all the land held by a person or as the case may be by a family unit whether in State or any part of India, was found to be beyond legislative comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be para materia, they cannot be stated to be impliedly struck down. Merely because the provisions of Gujarat Act were upheld by the Supreme Court would not mean that the provisions of Maharashtra Act are also free from any legal infirmity, more so when they have been found to be distinctly different. 43. Now we proceed to record our answers to the questions formulated by us in our order dated 26th August, 2009: (a) In our humble view, the appropriate course of action before the learned Single Judge would have been to decide the case in the light of the judgment of the Full Bench of this Court in Shankarrao's case (supra) and the judgment of the Supreme Court in the case of Shrikant Karulkar (supra). However, keeping in view the language of Rule 7 of the Bombay High Court, Appellate Side Rules, 1960 and feeling that the matter can be appropriately decided by the larger bench, the question raised being of some importance, this Bench has proceeded to deal with the matter on merits. (b) From the findings recorded by the Supreme Court in the case of Srikant Karulkar (supra), it is clear that the Full Bench judgment of this Court has neither been overruled nor can be stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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