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TMI Blog1979 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... his estate. He also engages to undertake, according to his means, measures to secure the welfare and prosperity of the population of his estate. He will, according to his means, expand money on necessary public works, and especially on the part which lies within his territory of the Rajpipla-Khandesh Road which Government have ordered to construct. Article V—In consideration of the Vasava's engagements in this agreement, the State hereby forgoes all claims to revenue from the estate of any description, exclusive of opium, but including Chhapari and other veras and abkari and forest revenue. The revenue management of the Estate shall be with the Vasava entirely, subject only to the general control of the Rajpipla State and the Political Agent. But the Abkari management shall remain with the State, a sum being fixed as annual compensation to the Vasava in future. This amount shall be settled by the State and the Vasava, subject in case of disagreement to reference to the Political Agent, and appeal to Government by either party. Article VII—The State engages to allow the Vasava to exercise full civil jurisdiction within his estate, and retain all receipts therefrom as well as al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the take-over pointing out that accession of Rajpipla did not effect in any way the status and rights of Sagbara since it was a distinct pointed out that the Estate, the village and all other properties belonged to the Vasava and they were his private and personal properties. The protests, couched in a number of letters to the Govt. of Bombay, did not get any response, except an order on 16th Nov., 1950 sanctioning an allowance of Rs. 2,000 p.m. for his life. When Bombay did not respond, he petitioned, by a memorandum dt. 29th Aug., 1953, to the Govt. of India, to make a suitable arrangement for the transfer of jurisdiction, make a proper provision for privy purse and his private properties recognised and made over. The Govt. of India, however, by their letter of 28th June, 1954 regretted that the Vasava cannot be recognized as a Ruler and so no privy purse can be allowed and the villages which were claimed as private properties could not be restored but the income of those villages had been taken into account in fixing the allowance of Rs. 2,000. At this state, the Govt. of Bombay stopped from August, 1955 the monthly allowance of Rs. 2,000 also, since, according to the Govt. of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 1955. The Gujarat State was carved out in 1960 and land legislations had been passed abolishing the rights of the superior title-holders. The continuation in their midst the Sagbara Estate was an anachronism. So, the Govt. passed a separate legislation "The Sagbara and Mehwassi Estates Regulation Act, 1962". It came into effect on 1st Dec., 1962. s. 4 of this Act reads : "4. Abolition of tenure of Sagbara estate, Dumala villages and Mehwassi estate and incidental provisions-(1) Notwithstanding anything contained in any agreement, custom, usage, or any decree or order of a Court, or any law for the time being in force with effect on and from the appointed day, — (i) the tenure on which the Sagbara estate, a Dumala village and a Mehwassi estate is held shall be and is hereby abolished. (ii) Save as expressly provided in this Act, all rights of the Vasava, Dumaldar or Mehwassi in respect of the Sagbara estate, Dumala village or as the case may be, Mehwassi estate and all other incidents appretaining to the said tenure shall be and are hereby extinguished, and all land comprised in the Sagbara estate, a Dumala village and Mehwassi estate shall be subject to the payment of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all rights or over the same or appertaining thereto, the property of the State Government and all rights held by the Vasava, a Dumaldar or a Mehwassi in such property shall be deemed to have been extinguished and it shall be lawful for the Collector subject to the general or special orders of the State Government, to dispose them of as he deems fit, subject always to the rights of way and other rights of the public or of individuals legally subsisting. Explanation—For the purposes of this section land shall be deemed to be uncultivated if it has not been cultivated for a continuous period of three years immediately before the appointed day". The compensation was fixed under ss. 10 and 11 which stated : "10. Compensation to Vasava, Dumaldar and Mehwassi in respect of property vesting in Government under s. 9—If the Vasava, or Dumaldar or Mehwassi proves to the satisfaction of the Collector that he had any right or interest in any property referred to in s. 2 he shall be entitled to compensation as follows— (a) if the property in question is waste, or uncultivated but cultivable land, and is not forest land the amount of compensation shall not exceed three times the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h or in transferable bonds as provided in sub-s. (2) or partly in cash and partly in transferable bonds, according as the State Government may think fit. (2) Where any amount of compensation is to be paid in transferable bonds, such bonds shall from the date of issue carry interest at the rate of three per cent per annum and shall be repayable, during the period of twenty years from the said date by equated annual instalments of principal and interest. (3) The bonds shall be of such denomination and shall be in such forms as may be prescribed". 9. When the Regulation came into force in 1962, the Vasava filed writ petitions in the High Court and obtained a stay order. Thereafter, there seemed to have been an understanding with the Govt. and the writ petitions were withdrawn in 1969. Then an application for compensation as per s. 11 was filed. In that application dt. 21st Feb., 1970, the Vasava gave up the claim for compensation from cultivators under ss. 5, 6 and 7 and also gave up the claim for compensation in respect of some village sites acquired by the Govt. The compensation fixed by the Collector was: Compensation for waste land Rs. 189 Compensation for Public land R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll India), New Delhi, in his said appellate order and the same were not declared by the Accountable Person as belonging to the deceased and as having passed on to him from the deceased as the Vasava of Sagbara. Sr. No. Items of properties not included in the Award dt. 24-4-1970. Value to be added for assessment purposes. 1 2 3 1. Deposit made on behalf of the deceased in the declaratory suit for establishing his heirship in the Civil Court at Broach. 4,46,675.98 2. Difference between the value of the estate of the deceased of Rs. 30,15,905.88 as determined under the said award and Rs. 30,00,000 as mistakenly computed by the Appellate Controller of Estate Duty. 19,905.88 3. Value of the deceased's house in Sagbara under the Second Award declared in favour of the Accountable Person. 8,610.00 4. Building at village Akkal Kuwa. 45,000.00 5. The value of land of three villages Chigda, Patri and Korai (6679 acres) 6,67,900.00 6. Revenue from 10-4-1948(when taken over by Government) to 1-12-1962(when Regulation Act came into force) . . (i) 92 villages Rs. 3,76,471.25 . . (ii) 22 Dumala villages Rs. 1,26,373.68 . . (iii) 2 Jagir villages Rs. 33,544.18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the ED Act is exactly the same as the powers given to the AAC under the IT Act. So, the ambit within which the powers have to be exercised is what is laid down in 66 ITR. The first item requiring enhancement is Rs. 4,46,676 being a deposit in the Civil Court. This has not been considered at all by the Dy. Controller. There is nothing in the records to show that he has applied his mind to the dutiability of this deposit. Hence this cannot come for consideration of enhancement. This would be equivalent to a new source of income under the IT Act, which the Supreme Court has laid down is outside the ambit for enhancement. The same reasons would exclude the consideration of item 3, the value of a house property amounting to Rs. 8,610. Item No. 6 represents the Revenue from the villages which were taken over by the Govt. in 1948 and restored to the Vasava in 1958. By the resolution of 15th Jan., 1958 the Govt. had resolved to return the Revenue from these villages to the Vasava. This item also is on par with the items considered above. The Dy. Controller had never applied his mind to its dutiability. Items No. 9 and 10 also are on the same footing. 15. That leaves for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, excluded it. So, what is required is not enhancement of the assessment but restoration of assessment already made but deleted. For that the only remedy is appeal and if the deletion was a mistake apparent, a rectification petition to the Appellate Controller is the proper remedy. They cannot be subject matters of enhancement. So we need not be detained further by items, 4,5 and 7. 17. This leaves us with item 8. This item at first caused some difficulty for us in deciding whether it was considered or not by the Dy. Controller. His order mentions a total area of 81,763 acres consisting of forest land and ordinary cultivable land. There is no item of 88,442 acres reflected in the assessment order. We have also gone through the records of the Dy. Controller and we do not have any evidence that he considered lands extending 88,442 acres apart from 81,763 acres. So this item also stands in the same footing like others, i.e., the items were not processed for assessment by the assessing authority. 18. Thus, on law, the Department cannot ask for enhancement of the 10 impugned items in para 8 of the petition. Even if they have a case, it is doubtful if the Tribunal has powers for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the agreement between Sagbara and Rajpipla and the correspondence with the Govt. of Bombay and Govt. of India, he submitted that when the deceased died there was no property left by him. Whatever he had as property had been taken away in 1948. There was no question of and compensation as none was admitted as payable. Even the allowance of Rs. 2,000 p.m. had been stopped. It was only after the death that the Govt. considered the petitions favourably. From the tenor of the Govt. Resolution of 15th Jan., 1958, it would be seen that it was an altogether new grant to the succeeding Vasava. The deceased Vasava was feudatory, but the successor was recognised as a chieftain. He was also made a superior holder which was not so earlier. No land revenue was payable before, but now that has been imposed. There were five cardinal differences in respect of the estate as between the deceased and the successor. So, it is not the same estate. It is not title derived from deceased. So, no property passed. With regard to valuation, he submitted that Rs. 30 lakhs had been fixed as compensation on the basis of value in 1962. The date of death is April, 1957. So, the value of 1962 has to be reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s this a fresh grant or is this a recognition of pre-existing rights? On facts, he submitted, it would be seen to be only a recognition. Then, it is deemed to pass on death in 1957. He submitted further that if deeming fiction is not accepted, it would give rise to a fallacy. Between 1948 to 1958 there was no Vasava and the estate did not vest in anyone. He further pointed out that what was recognised is not the person, but the rights. With regard to the stoppage of maintenance allowance, he submitted that the then Bombay Govt. by mistake thought that the cash allowance was a Jagir allowance and hit by the 1955 act. In 1950, the Govt. realised that it was not. Only in 1952, the Vasava ceased to be owner of the Estate. With regard to the Act passed in 1952 by the Gujarat Govt. he pointed out that it was an Act to abolish and tenures. What ever was not taken over specifically remained with the Vasava and was covered by s. 9. The compensation under s. 10 is for the proprietary rights. It was these rights which were valued initially at Rs. 30 lakhs. Apart from the compensation for property taken over under s. 9, there were other properties as well as rights over them which were transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajpipla State. It is not necessary for us to go into the niceties of this point, except to show that he was a Ruler conferred with certain powers within his territory. 24. Now, the Govt. of India did not, obviously, keep in mind that Sagbara was not part of Rajpipla when the administration was taken over on 10th June, 1948. They took possession of the Estate as well as the personal properties of the Vasava consisting of the three Dumala villages. Now, on our finding that Sagbara was a separate political entity ruled by the Vasava with powers recognised under the 1890 agreement, the action of Govt. of India amounted to an annexure of the territory. We, therefore, accept that Sagbara became part of the then Indian territory by an Act of State. 25. We next consider the effect of an Act of State on the rights of a citizen of the annexed territory. Before we go into the details of this issue, we should remember that the deceased Vasava had two distinct types of properties. He as the ruler of Sagbara treated all the properties within the Estate as his, except those for which his subjects has a title. He a was also a private citizen and as such he had some private properties also. Cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Privy Council in "Secretary of State vs. Bai Rajbai', AIR 1915 PC 59 at p. 62 (F) and also in AIR 1924 PC 216 at p. 217 (D), the burden of proving that the new sovereign has recognised the old rights lies on the party asserting it. The learned Solicitor-General relies on these cases". On the other hand, the American view is different. In para 17, their Lordships give a summary, according to which an Act of State does not interfere with the private rights of property of the citizens of the ex-sovereign. But in later decisions, the Supreme Court had followed the views held by the Privy Council in full above. Please see the Dalmia Dadri case (5) and State of Saurashtra vs. M. Abdulia(6). So, in India the position is that none of the rights that existed earlier would ensure before the succeeding sovereign. Although the passage quoted earlier would give the impression that it is only the enforceability in a Municipal Court that is taken away and not the rights as such it really means, all rights in property get extinguished. This is made clear in the Gujarat High Court decision in Vora Fide Ali vs. State(7). In a passage we quote below, the High Court had summarised the entire positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this inquiry has shown that a sum of Rs. 4,000 approximately is recoverable from you. In the circumstances it is regretted that it is not possible to modify the decision already communicated to you by the Bombay Government. Yours faithfully, sd/-(K.N.V. MAMBISON) Under Secretary to the Govt. of India. To : Shri Karansinhji Fatehsinhji, Vasava of Sagbara, C/o Shri Y.N. Malik. Malik Building, Rajpipla, District Broach". There is no ambiguity about this letter. The Govt. has not recognised any of Vasava's rights over the Estate other than the Dumala villages. It would amount to a repudiation or ignoring of his rights. The Govt. had a right to do so as part of the Act of State. It is well settled that the new sovereign can exercise his rights of repudiation of the rights of the individual subjects of the ex-sovereign after the assumption of de facts or de jure powers over the territory. So long as it is not exercised, this right of the new sovereign is only kept in abeyance, to be used at any time later even after the alien citizens have been absorbed and become regular citizens of the new sovereign. Applying this principle to the facts of the case, after June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r whose act is alleged to constitute waiver or relinquishment had full knowledge of the prerogative or sovereign power of the Government of Bombay to ignore or repudiate the particular rights in question and further the officer had the authority to waive to relinquish such prerogative or sovereign power on behalf of the Government. These elements of waiver or relinquishment are lacking in so far as the acts of the Forest Authorities in issuing authorizations and pass-books to the Contractor are concerned and those acts cannot, therefore, be relied upon as constituting waiver or relinquishment by the Government of Bombay of its prerelinquishment by the Government of Bombay of its prerogative or sovereign power to ignore or repudiate the rights of the Jagirdar in respect of the Gotimda forest". Applying this test, we find that the memorandum in 1954 was from the Govt. of India, issued by responsible officers, who had the full knowledge of the facts and who are authorised on behalf of Govt. of India to act in these matters. So the letter of 1954 cannot be treated as a link in the final decision making. It was the decision itself. If that is so, the memorandum of 1958 recognising the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reach of contract. It is possible for the partner who had joined later but who was given the benefit with retrospective effect from an earlier date to plea that on that date when the other partners had done certain acts he could not be held responsible because in actual fact he was not a partner therein. This point has been brought out well in Weddington vs. O'Callaghan(8). At page 197 Justice Rowlatt observed— "When people enter into a deed of partnership and say that they are to be partners as from some date which is prior to the date of the deed, that does not have the effect that they were partners from the beginning of the deed. You cannot alter the past in that way. What it means is that they begin to be partners at the date of the deed, but they are to take the accounts back to the date that they mention as from which the deed provides that they shall be partners. There is no sort of doubt at all that is the only effect which such a deed can have. No deed can alter the past". We would apply the above ratio and hold that it is not possible to alter the past and make the deceased Vasava what he was not merely because Govt. of India thought it fit to make good for their lap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land revenue in respect of the estate. As a ruler, his predecessor did not have to pay any land revenue to any one. The letter of 19th Jan., 1958 from the Govt. of India made it clear that the Govt. wanted to regularize the take-over of the estate on the footing that the Vasava of Sagbara is only a superior holder of land. This had been made further clear by the 1962 enactment, the Sagbara and Mewasi Estates Regulations etc. 1962, which we had discussed at para 8 of this order. It will be seen that the content of the rights of the successor was completely different from the rights his predecessor had and, therefore, it cannot be said that it was only recognition of the existing rights. It has to be only a fresh grant. 33. The Appellate Controller had placed reliance on the provisions of s. 2(16) defining property passing on death. He had pointed out that this could include property passing after an interval. In this case, on facts, there is no question of property passing after an interval i.e. because in 1948 after the Act of State the property got vested with the Govt. of India and in 1958 a fresh grant containing some of the rights in respect of the lands in that estate was g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njoyment of ownership of Khangi villages, lands, Jagirs, grants etc. existing on 1st April, 1948 are hereby guaranteed. This guarantee is without prejudice to the right of Government of Bombay to issue any legislation which does not discriminate against the State and their subjects". It is well known that identical letters had been given to all the rulers who agreed to merger. Now, the ruler of Rajpipla having been given a similar guarantee, those persons who had enjoyed ownership grants etc. of villages, which were existing on 1st April, 1948, had a guarantee that their rights would be un disturbed. The ruler of Sagbara in his personal capacity had been granted the ownership of the Dumala villages. The letter of guarantee of the Govt. of India would guarantee his continued ownership of these properties. 37. Now it is true that the settled position in law is that such guarantee given by a sovereign state is of no avail to the subjects of the predecessor sovereign because that does not by itself give a title to those inhabitants to enforce the stipulations in Municipal Courts. The right to enforce remains only with the high contracting parties i.e. the sovereign but the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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