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KEHAR SINGH & ORS •

DEWAN SINGH & ORS.

January 21, 1966

[K. SUBBA RAO, M. HIDAYATULLAH AND R.S. BACHAWAT, JJ.]

Cus1on1-Jats of Amritsar District-Adoptio11r--Diffefence between adoption as heir and formal adoption-Test of formal adoption-Severence of ties with natural family-Rlght of person adopted to the property of co/. laterals of adopting family.

The revenue authorities sanctioned mutation of the lands left by S, an Aulakh Jat of Tehsil Ajnala in Amritsar District of the Punjab, in favour of the appellants who were collaterals of S in the 8th degree. A suit for possession of the said lands was filed against them by the respondents who claimed the lands as descendants of K.

According to them K Wa5 the daughter's son of M, a collateral of S in the 5th clegrce, and had been formally adopted by M as his son.

The trial court held that the adoption of K was the usual customary appointment of an heir and that by the custom Of Jats in Amritsar District an appointed heir was entitled to succeed collaterally in the family of his adoptive father anc!. consequently K was the preferential heir to S.

The first appellate court agreed with the trial court that the adoption of K was the customary appointment of an hei"r, but rejected K's claim to be preferential heir on various grounds.

The High Court in second appeal held that under the customary law K, as the adopted son of M was entitled to succeed collaterally in his adoptive father's family; on this view it restored the trial Court's decree.

The appellants came to this Court on certificate.

HELD: (i) There is a presumption that the entries in Riwaj-i-am are correct and if there is a conflict between Rattigan's digest and the Riwaj-iam, normally the Riwaj-i-am of the locality prevails.

(ii) Under the customary law of the Jats in Amritsar District when the customary adoption is formal and the adopted son is completely transplanted in the family of his adoptive father,. he is entitled to succeed to the collateral relatives of the adoptive father. This finding is in harmony with the Riwaj-i-am of the Amritsar District, i.s supported by judicial deciswns, and is not in conflict with Art. 49 of Rattigan's Digest. On the other hand if the customarjr adoption amounts to a mere appointment of an heir, the appointed heir is not entitled to succeed to the coUateral relatives of the adoptive father.

This finding is in harmony with Art. 49 of the Rattigan'• Digest and the judicial decisions, and is consistent with the Riwaj-i-am properly interpreted in the light of the decided cases.

[398 C, DJ

(iii) It is a question of fact in each case whether the adoption by a Jat in the Amritsar District is formal or informal. The adoption is formal if the parties manifest a clear intention that there should be a complete change of the family of the adopted son, so that he ceases to be a member of his natural family and lose his right of collateral succession in the family and at the same time becomes a member of the adoplive father's family and acquires a right of collateral succeion in the family.

The losse.. of the right of collateral succession in the natural family is strong evidence to show that the adoption is formal and effects a complete change

in the family.

On the other hand retention of the ri$ht of collateral succession in his natural family indicates that the adopl!on was informal by way of customary appointment of an heir.

[398 E-GJ

(iv) In the present case the courts bad found, and the finding was amply supported by materials on the record, that the adoption of K was no more than a mere appointment of an heir by the custom of rhe Jats in the District of Amritsar.

The onus to show otherwise was on the re&- pondents.

The fact lhat K succeeded to the lands left by his natural brother and by one of the collaterals of his narural family stroogly indicated rhat the adoption of M did nor effect a change in his family. K's adoption not being a formal one, he could not be a preferential heir to S.

[398 H; 399 DJ

Case law referred to.

OvII. APPELLATE JURISDICllON : Civil Appeal J-; o. 429 of c 1963.

Appeal from the judgment and decree dated October 6, 1958 of the Punjab High Court in Civil Regular Second Appeal No.

340 of 1953.

Gopa/ Singh, for the appellants and respondent No. 11.

N. N. Keswani, for respondent No. I.

The Judgment of the Court was delivered by

Bachawat, J. : The parties arc Aulakh Jats of Tehsil Ajnala in Amritsar District, and are governed by customary law in matters of succession and adoption. 'The dispute concerns succession to the property of one Santa Singh alias Din Mohammad. Santa Singh has not been heard of for a long time and is presumed to be dead.

The revenue authorities sanctioned mutation of the lands left by him in favour of the defendants, who are his collaterals of the 8th degree.

One Megh Singh was the collateral of Santa Singh in the 5th degree.

Megh Singh died more than 50 years ago. Before his death, he adopted his daughter's son, one Kala Singh. Kala Singh has died leaving his sons, Dewan Singh and Gian Singh as his heirs. Dewan Singh and Gian Singh instituted a suit in the Court of the Subordinate Judge, First Class, Ajnala praying for a decree for possession of the lands left by Santa Singh and alleging that Megh Singh adopted Kala Singh as his son, took him out of his natural family, transplanted him completely in the family of Mcgb Singh and bestowed on him the rights of a natural son, according to the custom by which the parties were governed, Kala Singh was entitled to succeed as a rcversionary heir in the family of his adoptive father and was the preferential heir of Santa Singh.

The contesting defendants alleged that the adoption of Kala Singh amounted to the appointment of an heir only and they denied that according to custom Kala Singh was the reversionary heir of Santa

Singh or entitled to inherit his lands.

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The Subordinate Judge, Ajnala and the District Judge, Amritsar concurrently held that the adoption of Kala Singh was the usual customary appointment of an heir. The trial Court also held that by the custom of Jats in Amritsar District an appointed heir was entitled to succeed collaterally in the family of his adoptive father and consequently, Kala Singh was the preferential heir of Santa Singh. On appeal, the District Judge, Amritsar set aside the decree passed by the trial Court, and dismissed the suit. He held that according to custom, the adoption of a daughter's son was not permissible and the adoption of Kala Singh was, therefore, invalid.

He also held that under the customary law an adopted son could not succeed collaterally in his adoptive father's family if he was a non-agnate, i.e., if he did not belong to the Got of his adoptive father. On second appeal, the High Court set aside the order of the District Judge, Amritsar, and restored the decree passed by the trial Court. The High Court, held that it was not open to the defendants to challenge the validity of the adoption of Kala Singh, as the point was not in issue between the parties, and under the customary law, Kala Singh, as the adopted son of Megh Singh, was entitled to succeed collaterally in his adoptive father's family .

Some of the defendants now appeal to this Court on a certificate granted by the High Court.

In agreement with the High Court we hold that it is not open to the defendants to contend that the adoption of Kala Singh by Megh Singh was invalid. In the written statement, the defendants did not allege that Megh Singh had no power to adopt Kala Singh, as Kala Singh was the daughter's son of Megh Singh. As the validity of the adoption was not in issue, the parties had no opportunity to lead any evidence on the question whether by the special custom of the parties Megh Singh could lawfully adopt his daughter's son.·

The substantial point in controversy between the parties is whether by the custom governing the fats of Amritsar District Kala Singh was entitled to succeed collaterally in the family of his adoptive father. Some general customs as to adoption are found to exist in the Punjab, and they are collected in Rattigan's Digest of Customary Law. Some of the customs observed in the several Districts and Tehsils of the Punjab are collected in the Riwaj-i-am.

There is a presumption that the entries in the Riwaj-i-am are correct, and if there is a conflict between Rattigan's Digest and the Riwaj-i-am, normally the Riwaj-i-am of the locality prevails, see Jai Kaur v. Sher Singh (I), Sa/ig Ram v. Munshi Ram (2).

Judicial decisions furnish reliable instances in which the custom in question was recognised or departed from.

Oral and documentary evidence of mutations and other transactions in which the custom was

(I) (1960] 3 S.C.R. 979.

(2) [1962] l S.C.R. 470, 474-475.

recognised or departed from are also relevant material to prove or disprove the custom.

A customary adoption in the Punjab is ordinarily no more than a mere appointment of an heir creating a personal relationship between the adoptive father and the appointed heir only, see Mela Singh v. Gurdas (1). There is no tie of kinship between the appointed heir and the collaterals of the adoptive father. The appointed heir docs not acquire the right to succeed collaterally in the adoptive father's family.

The status of the appointed heir is thus materially different from that of a son adopted under the Hindu law.

The general custom negativing the right of the appointed heir to succeed collaterally in the family of his adoptive father is stated in Art. 49 of Rattigan's Digest of Customary Law, 13th Edn .. p. 572 thus :

"49.

Nor, on the other hand, does the heir acquire a right to succeed to the collateral relatives of the person who appoints him, where no formal adoption has taken place, inasmuch as the relationship established between him and the appointer is a purely personal one."

The rule in Art. 49 does not apply to a formal adoption by the customary method. The customary formal adoption completely severs the connection of the adopted son with his natural family and transplants him from his natural family to the adoptive family.

Such an adoption confers on the adopted son the right of collateral succession in the adoptive father's family and takes away the right of collateral succession in the natural family.

The formal adoption may be made in accordance with custom and by observing the customary forms, and it is not necessary to comply with the rules of Hindu law in the matter of ritual or otherwise.

See Abdur Rehman v. Ra1<f111bir Singh (2), Warya111a11 v. Kanshi Ram (l).

The Manual of Customary Law of the Amritsar District by H. D. Craik in 1914 records the following question and answcr-

"Question 91-Can an adopted son succeed colla- G terally in the family of his adoptive father ?

Answer 91.

All the tribes state that an adopted son succeeds collaterally in the family of his adoptive father, with the exception of Brahmans and Khatris of Neshta, who say that he docs not do so.

The rule defined by the courts, however, is that an adopted son has no right to ----

(1) Jl92lJ I.LR 3 Lah. 362 F.B.

(2) 11949] 51 P.L.R. 119. tl) 11922] I.LR. 3 Lah. 17

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succeed in this manner. The latest ruling on this point is P.R. 107 of 1913 in which it was held that among Jat Sikhas of the Taran Taran tehsil an adopted son, appointed by the usual customary method, does not succeed to collaterals as his adoptive father's representative."

The English translation of the Urdu version of the Riwaj-1-am of the Amritsar District for the year 1940 (Ex. P. C/l) records the following question and answer :- ·

No. of question

Question

Can an adopted son succeed collaterally in the family of his adoptive father ?

Answer

All the tribes, yes.

See Schedule I for relevant mutations.

See Schedule II for judgments in Civil cases.

Schedule I annexed to Ex. P.C./l gives 17 instances of mutations on collateral successions of adopted sons in the family of the adoptive father. Schedule ll annexed to Ex. P.C./l is not printed in the paper book. The English version of the Rhvaj-i-am of the Amritsar District published by A. MacFARQUHAR in 1947 gives the list of the relevant judicial decisions bearing on question

90. The decided cases show that where the adoption is by way of a customary appointment of an heir, the adopted son does not succeed collaterally in the adoptive father's family.

The latest Riwaj-i-am refers to the Court rulings without disapproval. In the light of the decided cases, the entries in the Riwaj-i-am recognising the adopted son's right of collateral succession in the adoptive father's family should be taken to apply to cases of customary formal adoptions and not to cases of adoptions by way of customary appointments of heirs.

The relevant judicial decisions may be briefly noticed.

In Jowala Singh v. Mt. Lachmi and others(!) (Gil Jats of Tehsil Ajnala, Amritsar), Mangal Singh v. Ti/ok Singh (2) (Sohel Jats of Tehsil Ajnala, Amritsar), Chetu v. Jawand Singh and others (3) (Sikh Jats of Tehsil Taran Taran, Amritsar), it was held that an heir appointed under the customary law of Jats in the District of Amritsar does not acquire a right to succeed to the collaterals of the adoptive father, and in Jndar Singh v. Mt. Gurdevi (4) (Amritsar Jats), it was held that he was not a lineal descendant of the adoptive father within the meaning of s. 59 of the Punjab Tenancy Act XVI of 1887.

(I) 14 P.R. of 1884.

(3) 107 P.R. of 1913.

(2) 61 P.R. of 1894.

(4) A.1.R. 1930 Lah. 897.

Conversely, the appointed heir retains the right of collateral sue- A cession in his natural family.

See Jagat Singh v. Jshar Singh () (Amritsar Jats). On the other hand, according to the customs of Jats in the Amritsar District, in a case of a formal adoption effecting a complete transplantation of the adopted son in the adoptive father's family, the.adopted son is entitled to inherit collaterally in the adoptive father'& family. See Teju v. Kesar Singh (2), affirming B the decision of Kapur, J. in Teja Singh v. Kesar Singh (3).

We thus find that under the customary law of Jats in Amritsar District, where the customary adoption is formal and the adopted son is completely transplanted in the family of his adoptive father,

lie is entitled to succeed to the collateral relatives of the adoptive father. This finding is in harmony with the Riwaj-i-am of the Amrit- C sar District, is supported by judicial decisions, and is not in conflict with Art. 49 of Rattigan's Digest.

On the other hand, if the customary adoption amounts to a mere appointment of an heir, the appointed heir is not entitled to succeed to the collateral relatives of the adoptive father. This finding is in harmony with Art. 49 of Rattigan's Digest and the judicial decisions, and is con- D sistent with the Riwaj-i-am properly interpreted in the light of the decided cases.

Jn Teju v. Kesar Singh (2), it was said that the ordinary rule in Amritsar District is that the adoption is complete. Jn other cases, it was said that ordinarly such an adoption is by way of a customary appointment of an heir. The true rule appears to be that it is a question of fact in each case whether the adoption by a Jat in the Amritsar District is formal or informal. The adoption is formal if the parties manifest a clear intention that there should be a complete change of the family of the adopted son, so that he ceases to be a member of his natural family and loses his right of collateral succession in that family and at the same time becomes a member of the adoptive father's family and acquires a right of collateral succession in the family.

The loss of the right of collateral succession in the natural family is strong evidence to show that the adoption is formal and effects a complete change in the family. On the other hand, retention of the right of collateral succession in hi3 natural family indicates that the adoption was informal by way of customary appointment of an heir.

The onus is upon the plaintiffs-respondents to prove that the adoption of Kala Singh was formal and effected a complete change in his family.

On the death of the adoptive father Megh Singh, Kala Singh inherited the properties of Megh Singh, and on the death of Kala Singh, his sons, Gian Singh and Dewan Singh, inherited those properties.

But these successions arc consistent with the

(ll I.LR 1l Lah. 645.

(2) A.l.R. 1954 Punjab 30.

(3) A.I.R. 1951 Punjab 117.

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informal ppointment of Kala Singh as an heir to Megh Singh.

According to custom, the appointed heir succeeds to the properties left by the adoptive father, and on the death of the appointed heir, his male issue succeeds: see Rattigan's Digest of Customary Law, 13th Edn., Arts. 52 and 54, pp. 572-573. The succession of Kala Singh as the reversionary heir of one Mst. Bhagan is cited as an illustration of collateral succession of the adopted son in his adoptive father's family in the list of mutations given in Sch. 1 of the Riwaj-i-am of 1940 (Ex. P.C./l). But the oral testimony on the record of this case discloses that Mst. Bhagan, who was the widow of a predeceased son of Megh Singh, was given some land by Megh Singh for her maintenance, and on her death, Kala Singh succeeded to this land. It will appear, therefore, that Mst.

Bhagan got a life estate in this land, and on her death, the land reverted to Kala Singh as the adopted son of Megh Singh. The succession of Kala Singh to this land is, therefore not an instance of collateral succession of Kala Singh in his adoptive father's family, and this was fairly conceded by learned counsel for the respondents. Considering all the circumstances of the case, the trial

Court and the first Appellate Court concurrently found that the adoption of Kala Singh was by way of customary appointment of an heir to Megh Singh. On second appeal, the High Court did not interfere with this finding. The finding is amply supported by the materials on the record. It appears that after his adoption Kala Singh succeeded to the lands left by one Makhan, his natural brother and by one Hira Singh, his ollateral in his natural family. These collateral successions m the natural family strongly indicate that the adoption of Kala Singh did not effect a change in his family. The adoption of Kala Singh was no more than a mere appointment of an heir and by the custom of the fats in the District of Amritsar he was not entitled to succeed collaterally in his adoptive father's family.

For this reason, the suit out of which this appeal arises, must be dismissed.

The District Judge, relying on Mangat Singh v. Tilok Singh(') held that as Kala Singh was not an agnate of his adoptive father, he was not entitled to succeed collaterally in his adoptive father's family, even assuming that his adoption was valid. This aspect of the matter was not considered by the High Court at all.

In view of our conclusions on other points, we do not express any opinion on this point.

We allow the appeal, set aside the decree passed by the High Court, restore the decree passed by the District Judge of Amritsar and direct that the suit be dismissed. The parties will pay and bear their own costs throughout.

Appeal allowed.

(1) 61 P.R. 1894.

KEHAR SINGH & ORS

DEWAN SINGH & ORS

January 21, 1966

K. SUBBA RAO

M. HIDAYATULLAH

R.S. BACHAWAT, JJ.

Amritsar District

Rattigan

Art. 49

Art. 49

Amritsar

N. N. Keswani

Bachawat

Santa Singh alias Din Mohammad

Santa Singh

Megh Singh

Kala Singh

Dewan Singh

Gian Singh

Subordinate Judge, First Class, Ajnala

Mcgb Singh

Santa

Singh

District Judge, Amritsar

Punjab

(1960] 3 S.C.R. 979

Art. 49

Art. 49

H. D. Craik

Brahmans

Neshta

Schedule I

Schedule II

Schedule I

A. MacFARQUHAR

s. 59

Tenancy Act XVI of 1887

Kapur

Amrit- C sar District

Art. 49

Art. 49

Arts. 52 and 54

Bhagan

Bhagan

Makhan

Hira Singh

District Judge of Amritsar


Setty, who was presumably the karra of the Bhaskara family, by five members of the Addanki family, who presumably represented all the members of the Addanki family.

Therefore, according to the Bhaskara defendants, the plaintiffs had no cause of action.

Alternatively they contended that the suit was barred by time.

IR the view which we take it would not be necessary to consider the second defence raised by the Addanki family.

The relevant portion of the karar reads thus : "As disputes have arisen in our family regarding partition, it is not possible to carry on the business or to make investment in future.

Moreover, you yourself have undertaken to discharge some of the debts payable by us in the coastal parts in connection with our private business.

Therefore. from this day onwards we have closed the joint business. So, from this day onwards, we have given up (our) share in the machine etc., and in the business, and we have made over the same to you alone completely by way of adjustment. You yourself shall carry on the business without ourselves having anything to do with the profit and loss. Herefor, you have given up to us the property forming our Venatasubbayya's share which you have purchased and delivered possession of the same to us even previously.

In case you want to execute and deliver a proper document in respect of the share which we have given up to you, we shall at your own expense, execute and deliver a document registered."

This document on its face shows that the partnership business had come to an end and that the Addanki family had given up their share in the "machine etc., in the business" and had made it over to the Bhaskara family.

It also recites the fact that the Addanki family had already received certain property which was purchased hy the partnership presumably as that family's share in the partnership assets.

The argument advanced by Mr. Alladi Kuppuswami is that since the partnership assets included immovable property and the document records relinquishment by the members of the Addanki family of their interest in those assets, this document \\as compulsorily registerable under s. 17(1)(c) of the Registration Act and that as it was not registered it is inadmissible in evidence to prove the dissolution of the partnership as well as the settlement of accounts.

Direct cases upon this point of the courts in India are few but before we examine them it would be desirable to advert to the provisions of the Partnership Act itself bearing on the interest of partners in partnership property. Section 14 provides that subject to contract between the partners the property of the firm includes all property originally brought into the stock of the firm or acquired

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NARAYANAPPA v. KRISIITAPPA (Mudholkar, !.) 4 03

by the firm for the purposes and in the course of the busiess .of the firm. Section 15 provides that such property shall ordmanly be held and used by the partners exclusively for the purposes of the business of the firm. Though that is so a firm has no legal existence under the Act and the partnership property will, therefore, be deemed to be held by the partners for the business of the partnership. Section 29 deals with the rights of a transferee of a partner's interest and sub-s. (I) provides that such a transferee will not have the same rights as the transferor partner but he would be entitled to receive the share of profits of his transferor and that he will be bound to accept the account of profits agreed to by the partners. Sub-section (2) provides that upon dissolution of the firm or upon a transferor-partner ceasing to be a partner the transferee would be entitled as against the remaining partners to receive the share of the assets of the firm to which his transferor was entitled and will also be entitled to an account as from the date of dissolution. Section 30 deals with the case of a minor admitted to the benefits of partnerships. Such minor is given a right to his share of the property of the firm and also a right to a share in the profits of the firm as may be agreed upon. But his share will be liable for the acts of the firm though he would not be personally liable for them. Sub-section (4) however, debars a minor from suing the partners for accounts or for his share of the property or profits of the firm save when severing his connection with the firm. It also provides that when he is severing his connection with the firm the court shall make a valuation of his share in the property of the firm. Sections 31 to 38 deal with incoming and outgoing partners. Some of the consequences of retirement of a partner are dealt with in sub-ss. (2) and (3) of s. 32 while some others are dealt with in ss. 36 and 37. Under s. 37 the outgoing partner or the estate of a deceased partner, in the absence of a contract to the contrary, would be, entitled to at the option of himself or his representatives to such share of profits made since he ceased to be a partner as may be attributable to the property of the firm or to interest at the rate of six per cent. per annum on the amount of his share in the property of the firm. The subject of dissolution of a firm and the consequences are dealt with in chapter VI, ss. 39 to 55. Of these the one which is relevant for this discussion is s. 48 which runs thus :

"In settling the accounts of a firm after dissolution the following rules shall, subject to agreement by the partners, be observed :

(a) Losses, including deficiencies of capital, shall be paid first out of profits, next out of capital and, lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits.

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NARAYANAPPA v. KRISHTAPPA (Mudholkar, !.) 405

"When a debt due to a firm is got in no partner, has any definite share or interest in that debt; his right is merely to have the money so received applied, together with the other assets, in discharging the liabilities of the firm, and to receive his share of any surplus there may be when the liquidation has been completed."

No doubt this decision was subsequent to the enactment of the English Partnership Act of 1890. Even in several earlier cases, as for instance, Darby v. Darby(') the same view has been expressed. That was a case where two persons purchased lands on a joint speculation with their joint monies for the purpose of converting them into building plots and reselling them at a profit or loss. It was held by Kindersley V.C. that there was a conversion of the property purchased out and out and upon the death of one of the partners his share in the part of the unrealised estate passed to his personal representatives. After examining the earlier cases the learned Vice-Chancellor observed at p. 995 :

"The result then of the authorities may be thus stated :-Lord Thurlow was of opinion that a special contract was necessary to convert the land into personalty : and Sir W. Grant followed that decision. Lord Eldon on more than one occasion strongly expressed his opinion that Lord Thurlow's decision was wrong. Sir J. Leach clearly decided in three cases that there was conversion out and out : and Sir L. Shadwell, in the last case before him, clearly decided in the same way. That is the state of the authorities .

Now it appears to me that, irrespective of authority, and looking at the matter with reference to principles well established in this Court, if partners purchase land merely for the purpose of their trade, and pay for it out of the partnership property, that transaction makes the property personalty, and effects a conversion out and out."

He then observed :

"This principle is clearly laid down by Lord Eldon in Crawshav v. Collins(2) and by Sir W. Grant in Featherstonhaugh v. Fenwick(') and the right of each partner to insist on a sale of all the partnership property, which arises from what is implied in the contract of partnership, is just as stringent as a special contract would be. If, then, this rule applies to ordinary stock-in-trade, why should it

(1) 61 E.R. 992.

(2) 15 Yes. 218.

(3) 17 Yes. 298 .

not apply to all kinds of partnership property ? Suppose that partners, for the purpose of carrying on their business, purchase, out of the funds of the partnership, leasehold estate, or take a lease of land, paying the rent out of the partnership funds, can it be doubted that the same rule which applies to ordinary chattels would .apply lo such leasehold property ? I do not think it was ever questioned that, on a dissolution, the right of each partner to have the partnership effects sold applies to leasehold property belonging to the partnership as much as to any other stock-in-trade. No one partner can insist on retaining his share unsold. Nor would it make any difference in whom the legal estate was vested, whether in one of the partners or in all; this Court would regulate the matter according to the equities.

And Sir W. Grant so decided in Featlzerstonlzauglz v. Fenwick.( )"

We have quoted extensively from this decision because of the argument that the decision in Rodriguez's case(') would have been otherwise but for s. 22 of the English Act. Adverting to this Lindley has said :

"From the principle that a share of a partner is nothing more than his proportion of the partnership assets after they have been turned into money and applied in liquidation of the partnership, whether its property consists of land or not, must, as between the real and personal representatives of a deceased partner, be deemed to be personal and not real estate, unless indeed such conversion is inconsistent with the agreement between the parties. Although the decisions upon this point were conflicting, the authorities which were in favour of the foregoing conclusion certainly preponderated over the others, and all doubt upon the point has been removed by the Partnership Act, I 890, which contains the following section :

22. Where land or any heritable interest therein has become partnership, property it shall, unless the contrary intention appears, be treated as between the partners (including the representative of a deceased partner), and also ai between the heirs of a deceased partner and his executors or administrators, as personal or movable and not real or heritable estate."

Even in a still earlier case Foster v. Hale(') a person attempted to obtain an account of the profits of a colliery on the ground that it was partnership property and it was objected that (I) 17 Vos. 298.----·

(2) [1919) A.C. 59. (J) S Vcs. 30~.

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NARAYANAPPA v. KRJSHTAPPA (Mudholkar, J.) 407

there was no signed writing, such as the Statute of Frauds required., Dealing with it the Lord Chancellor observed :

"That was not the question : it was whether there was a partnership. The subject being an agreement for land, the question then is whether there was a resulting trust for that partnership by operation of law. The question of partnership must be tried as a fact, and as if there was an issue upon it. If by facts and circumstances it is establi shed as a fact that these persons were partners in the col- . liery, in which land was necessary to carry on the trade, the lease goes as an incident. The partnership being established by evidence upon which a partnership may be found, the premises necessary for the purposes of . that partnership are by operation of law held for the purposes of that partnership.'' It is pointed out by Lindley that this principle is carried to its extreme limit by Vice-Chancellor Wigram in Dale v. Hamilton(') .

Even so, it is pointed out that it must be treated as a binding authority in the absence of any decision of the Court of Appeal to the contrary.

It seems to us that looking to the scheme of the Indian Act no other view can reasonably be taken. The whole concept of partnership is to embark upon a joint venture and for that purpose to bring in as capital money or even property including immovable' property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in.

It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in; much less over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership. As already stated, his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from part" nership of the value of his share in the net partnership assets as on the date of dissolution or retirement after a deduction of liabilities and prior charges. It is true that even during the subsis tence of the partnership a partner may assign his share to another.

In that case what the assignee would get would be only that which is permitted bys. 29(1), that is to say, the right to receive the share of profits of the assignor and accept the account of profits agreed to by the partners. There are not many decisions of the High Courts on the point. In the few that there are the preponderating view is

(I) 5 Ha. 369 on appeal 2 Ph. 266.

MIOSup./CI/66-13

in support of the position which we have stated. In Joharmal v.

Tejram Jagrup(•) which was decided by Jardine and Telang JJ., the latter took the view that though a partner's share does not include any specific part of any specific item of partnership property, still where the partnership is entitled to immovable property, such share does include an interest in immovable property and, therefore, every instrument operating to create or transfer a right to such share requires to be registeted under the Registration Act. In coming to this conclusion he mainly purported to rely upon an observation contained in the fifth edition of Lindley on Partnership at p. 347. This observation is not to be found in the present edition of Lindley's Partnership nor in the 9th or 10th editions which were brought to our notice. The 5th edition, however, is not available. The learned Judge after quoting an earlier statement which is that the "doctrine merely amounts to this that on the death of a partner his share in the partnership property is to be treated

as money, not as land" says : "This obviously would not affect matters either during the lifetime of a partner-Lindley, L.J., says in so many words that it has no practical operation till his death (p. 348)-or as against parties strangers to the partnership, e.g., the firm's debtors." While it is true that the position so far as third persons are concerned would be different it may be pointed out that in Forbes v. Steven(') James V.C., has, as quoted by the learned Judge, said : "It has long been the settled law of this Court that real estate bought or acquired by a partnership for partnership purposes (in the absence of some controlling agree- E ment or direction to the contrary}, is, as between the partners and . as between the real and personal representatives of a partner deceased personal property, and devolves and is distributable and applicable as personal estate and as legal assets." Telang J., eeems to have overlooked, and we say so with great respect, the words "as between the partners" which precede the words "and as between the real and personal representative of the partner deceased" and to have confined his attention solely to the latter. We have not found in any of the editions of lindley's Partnership an adverse criticism of the view of the Vice-Chancellor.

But, on the contrary, as already stated, the view expressed is in fnll accord with these observations. Jardine J., has discussed the English authorities at length and after referring to the documents upon which reliance was placed on behalf of the defendant stated llil opinion thus :

"'To lay down that the three letters in question, which deal generally ith the assts, movable and imm?vable, without specifymg any particular mortgage or other interest in real property require registration, would, I incline to think, in the present state of the authorities, go

(I) I.LR~ i7Rom. :m-. -·

(2) L.R. JO Eq, 178.

.. \ .

NARAYANAPPA v. KRISHTAPPA (Mudholkar, J.) 409

too far. It may be argued that such letters are not 'in struments of gift of immovable property' but rather disposals of a share in a partnership of which the business is money lending, and the mortgage securities merely incidental thereto."

The view of Telang J., was not accepted by the Madras High

Court in Chitturi Venkataratnam v. Siram Subba Rao(').

The learned Judges there discussed all the English decisions as also the decisions in Sudarsanam Maistri v. Narasimhulu Maistri(2) and Gopala Chetty v. Vijayaraghavachariar(3) and the opinion of Jardine J ., in Joharmal' s case(•) held that an unregistered deed of release by a partner of his share in the partnership business is admissible in evidence, even where the partnership owns immovable property. The learned Judges pointed out that though a partner may be a co-owner in the partnership property he has no right to ask for a share in the property but only that the partnership business should be wound up including therein the sale of immovable property and to ask for his share in the resulting assets .

This decision was not accepted as laying down the correct law by a Division Bench of the same High Court in Samuvier v. Ramasubbier(').

The learned Judges there relied upon the decision in Ashworth v. Munn(•) in addition to the opinion of Telang J.,. and also referred to the decision Gray v. Smith(') in coming to a conclusion contrary to the one in the earlier case. It may be pointed out that the learned Judges have made no reference to the decision of the Privy Council in Gopla Chetty' s case(') though that was one of the decision relied upon by Phillips J., in the earlier case. In so far as Ashworth' s case(6) is concerned that was a case which turned on the provisions of the Mortmain Acts and is not quite pertinent for the decision on the point which was before them and which is now before us. In Gray. v. Smith(7) Kakewich J., held that an agreement by one of the partners to retire and to assign his share in the partnership assets including immovable property, is an agreement to assign an interest in land and falls within the. Statute of Frauds. The view of Kekewich J., seems to have received the approval of Cotton L.J., one of the Judges of the Court of Appeal, though no argument was raised before it challenging its correctness. It may, however, be observed that even according to Kekewich J., the authorities (Foster

v. Hale(') and Dale v. Hamilton(•~ establish that one may have an agreement of partnership by parol, notwithstanding that the partnership is to deal with land. He, however, went on to observe :

(I} l.L.R. 49 Mad. 738.

(2) 1.L.R. 1925 Mad. 149.

(3) l.L.R. 45 Mad. 378 (P.C.)~[1922] A.C. I (4) !.L.R. 17 Born. 235.

(5) l.L.R. 55 Mad. 72.

(6) (188u) 15 Ch. D. 163.

(7) 43 Ch. D. 208.

(8) 5 Yes. 318.

(9) 5 Ha. 369 on appeal 2 Ph. 266

"But it docs not seem to me to follow that an agreement for the dissolulion of such a partnership need not be expressed in writing, or rather than there need not be a memorandum of the agreement for dissolution when one of the terms of the agreement, either expressly or by necessary implication, is that the party sought to be charged must part with and assign to others an interest in land.

That seems to me to give rise to entirely different considerations.

In the one case you prove the partnership by parol; you prove the object, the terms of the partnership, and so on. But in the other case it is one of the essential terms of the agreement that the party to be charged shall convey an interest in land, and that seems therefore to bring it necessarily within the 4th section of the Statute of Frauds".

In the case before, us also in Samuvier's case(') the document cannot be said to convey any immovable property by a partner to another expressly or by necessary implication. If we may recall, the document executed by the Addanki partners in favour of the Bhaskara partners records the fact that the partnership business bas come to an end and that the latter have given up their share in "the machine etc., and in the business" and that they have "made over same to you alone completely by way of adjustment".

There is no express reference to any immovable property herein.

No doubt, the document does recite the fact that the Bhaskara family has given to the Addanki family certain property.

This, however, is merely a recital of a fact which had taken place

rlier. To cases of this type the observations of Kekewich J., which we have quoted do not apply. The view taken in Samuvier's -case(!} seemed to commend itself to Varadachariar J., in Thirumalappa v.

Ramappa but he was reversed in Ramappa v.

Thirumalappa.(2)

We may also refer to the decision of a Full Bench in Ajudhia Pershad Ram Pershad v. Sham Sunder & Ors.(3) in which Cornelius J., has discussed most of the decisions we have earlier referred to in addition to several others and reached the conclusion that while a partnership is in existence, no partner can point to any part of the assets of the partnership as belonging to him alone.

After examining the relevant provisions of the Act, the learned judge observed :

"These sections require that the debts and liabilities should first be met out of the firm property and there-

(I) I.LR. 55 Mad. 72.

(2) A.l.R. 1939 Mad. 884.

,3; A.I.R. 1947 Lah. 13.

...

I ~

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NARAYANAPPA v. KRJSHTAPPA (Mudholkar, J.) 411

after the assets should be applied in rateable payment to each partner of what is due to him firstly on account of advances as distinguished from capital and, secondly on account of capital, the residue, if any, being divided rateably among all the partners. It is obvious that the Act contemplates complete liquidation of the assets of the partnership as a preliminary to the settlement of accounts between partners upon dissolution of the firm and it will, therefore, be correct to say that, for the purposes of the Indian Partnership Act, and irrespective of any mutual agreement between the partners, the share of each partner is, in the words of Lindley : "his proportion of the partnership assets after they have been all realised and converted into money, and all the partnership debts and liabilities have been paid and discharged."

This indeed is the view which has commended itself to us.

Mr. Kuppuswamy then referred us to two decisions of English courts in In re Fuller's Contract(') and Burdett-Coutts v. Inland Revenue Commissioners(2) and on the passage at pp. 394 and 395 in Lindley's Partnership under the head "Form of Transfer" in support of his argument.

Both the cases relied upon deal with contracts with third parties and not with agreements between partners inter se concerning retirement or dissolution.

The passage from Lindley deals with a case where there is an actual transfer of immovable property and is, therefore, not in point.

Mr. Chatterjee brought to our notice some English decisions in addition to those we have adverted to in support, which agree with the view taken in those cases.

He has also referred to the decisions in Prem Raj Brahmin v. Bhani Ram Brahmin(3) and Firm Ram Sahay v. Bishwanath(4). We do not think it necessary to discuss them because they do not add to what we have already said in support of our view.

For these reasons we uphold the decree of the High Court and dismiss the appeal with costs.

-----·---·--

(1) (1933] Ch. D. 652.

(2) (1960] 1 W.L.R. 1027.

(3) l.L.R. [1946] 1 Cal. 191. (4l A.l.R. 1963 Patna 221.

Appeal dismissed.

Setty

Addanki

Bhaskara

Alladi Kuppuswami

s. 17(1)(c)

Registration Act

India

Section 14

Section 15

Section 29

Section 30

Sections 31 to 38

s. 32

ss. 36 and 37

s. 37

ss. 39 to 55

s. 48

Kindersley V.C.

Thurlow

W. Grant

Eldon

J. Leach

L. Shadwell

Rodriguez

s. 22

Lindley

Wigram

Jardine

Telang

Registration Act

Lindley

Madras High

Court

Joharmal

Gopla Chetty

Phillips

Ashworth

Kakewich

Kekewich

Cotton L.J.

Samuvier

Varadachariar

Cornelius

Indian Partnership Act

Kuppuswamy

Chatterjee


NAVINCHA:\DRA BABUBHAI -.; AGARSHETll AND

ORS.

BOMBAY REVENUE TRIBU'.'iAL AND ORS.

January 21, 1966

[A. K. SARKAR, J. R. MUDHOLKAR AND0 R. S. BACllAWAT, JJ.]

Bombay Parona/ /nams Abolition Act (42 o/ 1953), ss. 5, 17(1) and (5)-Gran/ oj land willi exemption regarding pay1nent of /and revenue- Jnam abolished-lnamdar's right to co1npe11sation.

The appellanlS were holders of shares in Inam villages. On the loams heing aboltshcd by Bombay Personal Inarns Abolition Act, 1953 they claimed compensation for their lnarns under s. 17 (I) of the Act.

By 1. 17(5). "Nothing is this section ahall entitle any person to compen'3tion o.i the ground that any inam village or inarn hind which has (sic.) wholly or pan.iaHy exempt from 1hc payment of Jand revenue has been under the provisions of thi.s Act made subject to the payment of full assessment in .accordance with the provisions of the Code." Section S of the Act providod,

"'(i) All inam villages or inam lands are and shall be liable to the payment of land revenue in accordance with the proviions of the Code ancl rules made thereunder and the provisioos of the ('.ode and the rules relating to unalienated land ahall apply

10 such lands.

(12) (a) An inamdar in respect of the inam land in his actual possession or in pOfisession of a person holding from him olher E than an inferior holder, referred to in clause (b), below or

(b) an inferior holder holding inam land on payn1ent of annual a"essment only shall primarily be liable to the State Government for the payment of land revenue, due in respect of such .. land held by him and shall be entitled to all the righta and shall be liahle to all obligations in rospect of ouch land as an occupant under the Code or the rules made thereunder or any F other law for the time being in force."

HELD (Per Sarkar J.) (I) On a construction of the Sanad by which the inams were granted, the grants were of villag6 and cxtmp1ion from land revenue as mentioned in s. 17(5).

What the tenant.. paid to the lnamdars wa..~ not somclhing which was due to the Government which the Inamdars kept to then1, elves but v:a<; rent due to the Inamdars.

[414 G;

415 CJ G Even afler the survey in the lnam villages in 1900 under the Bombay Land Revenue Code. 1879 the lnamdars remained the grantees of the soil exempt from payment of revenue and the tenants remained liable, a' before, to pay rent to the Inamdars.

[415 B-F]

(2) Section S of the Act does not show that the lnamdurs were claiming compC!l'iJtion for rhc loss of money that they U'\Cd t~ collect from the

inferior holders. the ri'.!ht 10 \vhich collec11on \Vas ahohshcd by the Act II and therefore s. 17 ( 5 1 did not apply to thorn. The fact that un<ler s. 5 the

1Jnamdar h<t" nl)t himc; elf been made liable for the revenue in respect of lhc land held hy th~ inferior holders. made no difference.

By s. S an 41:?

NAVINCHANDRA v. REVENUE TRIBUNAL (Sarkar,!.) 413

Inamdar has been deprived of his right to the assessment from the inferior holders and the infeoor holders have been made liable to pay that .. seament to the Government.

Therefore, in actual result, the Inamdar baa been deprived of his right to the assessment because the land ha.. been made subject to the payment of land revenue and he was, therefore covered by s. 17(5). [416 E-0]

Per Mudholkar, J. : Section 5 (I) of the Bombay Personal Inams Abolition Act, 1953, creates liability to pay land revenue to the Govcrament with respect to inarn lands, in accordance with the provi!ioo• of the Bombay Land Revenue Olde, 1879.

Where lands wero in poss"5sioo of inferior holders s. 5(2) (b) places the liability on the inferior holdera. The loss resulting to the inarndara is the direct consequenco of the operation of these provisions.

Therefore s. 17(5) of the Act bars the claim for compensation for loss of the right of the appellants to recover from the inferior holders land revenue assessed on the lands in their possession.

[419 C-E]

Per Bachawat. J :

The grants of the villages, on the construction of the deeds were grants of villages with partial exemption from payment of land revenue :wd were personal inams of the category specified ins. 2(l)(c)(i). The introduction of the survey settlement made no difference in the character 01 the inams. After the Abolition Act, the lands no longer enjoyed either

total or partial exemption from payment of land revenue. By •· 5 (I) of lhe Act, all inam lands are now liable to payment of full land revenue.

Bys. 5(2)(b), in respect of lands held by inferior holder> the inferior holders now enjoy the status of occupants, and are liable to pay the land revenue directly to the State Government. The appellants were not entitled to claim compensation in respect of the abolition of their right to re cover assessment from the inferior hoders, because such a claim is really on the ground that the inam lands which were formerly exempt from payment of land revenue have been subjected by the Act to payment of full assessment.

Such a claim is based bys. 17(5).

A grant of village or land with total or partial exemption of land revenue is essentially different from a grant of land revenue and the distinction has been preserved by the Act. On the extension of the grant

of lar.d revenue, the :namdar loses all rights in respect of the grant and he is therefore entitled to full compensation under s. 17 (I). On the other hand, on abolition of the grant of an inarn village or land the inamdar is allowed to retain and enjoy various rights and benefits, hut at the same time the right to compensation under s. 17 (1) is subject to the bar of :;. 17(5). f 420 H-421 HJ

CIVIL APPELLATE

JURISDICTION: Civil Appeals Nos. 1048- 1050 of 1963.

Appeals from the judgment and decree dated September 2 1958 of the Bombay High Court in Special Civil Applications Nos. JIOO, 1161and1162of1958.

D. B. Padhya, J. B. Nagar and A.G. Ratnaparkhi, for the H appellants (in all the appeals).

S. G. Patwardhan, and R. H. Dhebar, for the respondents Nos. 2 and 3 (in all the three appeals).

The following Judgments were delivered:

Sarkar, J. These three appeals concern compensation payable under the Bombay Personal Inams Abolition Act, 1952 to the appellants for abolition of their inams. Some of the appellants held shares in the inam \illage of Wanz and some in that of Dindoli. The appellants had moved the High Court at Bombay by several petitions under Arts. 226 and 227 of the Constitution for quashing the decision of the Bombay Revenue Tribunal regarding the compensation. The petitions were disposed of by the High Court by a common judgment. These appeals are against that judgment under a certificate granted by the High Court.

The appellants had claimed compensation under several heads based on different grounds but two of them survive. The first is that the appellants are entitled to compensation for loss of assessment payable to them by inferior holders, a special class of tenants holding lands from them. The Act does not expressly provide for compensation in respect of such lands. Sub-section

(l) of s. 17 of the Act however provides that if any person is aggrieved by the provisions of the Act abolishing any of his rights to or interest in property and if compensation for such abolition has not been provided for, such person may apply to the Collector for compensation. The appellants base their claim on this section.

Sub-section (5) of this section makes the right under sub-s. (I) unavailable in a certain case and the question is whether the appellants' claim fell within it. Now the sub-section is in these terms:·

S. 17(5)-Nothing in this section shall entitle any person to compensation on the ground that any inam village or inam land which has (sic.) wholly or partially exempt from the payment of land revenue has been under the provisions of this Act made subject to the payment of full assessment in accordance with the provisions of the Code.

Clearly this sub-section applies only to a certain kind of claim for compensation in respect of ; in inam village exempt from payment of land revenue. The appellants say that their inams were not of this kind and so the sub-section does not affect their claim.

According to them, their inams consisted of a grant of land revenue only. The nature of an inam depends on the sanad or the tenns of the grant. The High Court held on a construction of the sanads that the inams were grants of the villages with exemption from land revenue, because the words of the grant conveyed the soil and rights over trees. water, mines etc.

This view is obviously correct.

The appellants then said that notwithstanding that the soil had been granted, their inams were none the less of land revenue only. Their contention is that before the grants the tenants in

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NA VINCHANDRA v. REVENUE TRIBUNAL (Sarkar; J.) 41.5

occupation paid revenue to the Government and thereafter to the inamdars and the latter being exempt from the liability to pay it over to the Government, the net result was that the inamdars retained the land revenue and were, therefore, the grantees thereof.

This contention is idle. There is nothing to show that there were tenants holding lands in the villages before the grants which were made in 1794 and 1803 respectively and whether they paid anything and if so, what ? Furthermore, what the tenants paid to the inamdars (holders of the inams) after the grants was rent and not revenue; it was for the inamdars to fix the amount of it or forego it altogether if they so liked. What the tenants paid to the inamdars was not something which was due to the Government which the inamdars kept to themselves having been exempted from the liability to pay it over to the Government; it was rent due to the inamdars.

It was next said that whatever might have been the position earlier, after the introduction of the survey in the villages in 1900 under the Bombay Land Revenue Code, 1879 what a tenant paid to an inamdar was land revenue. There is no justification for this contention either. No doubt since the introduction of the survey the amounts payable by the tenants to the inamdars were all assessed under the Code. The nature of the assessment payable was not however altered thereby nor did it become land revenue .

The survey fixed the amount payable by a tenant to the inamdar and gave him certain rights. It also conferred certain benefits on the inamdar in the matter of the realisation of his dues. The fact that the assessment was made in the same way as land revenue made no difference. It did not change the right to the assessment.

Notwithstanding all this the inamdar remained the grantee of the soil and a person who was not liable to pay revenue in respect of it and likewise the tenant remained liable as before to pay rent to the inamdar.

Furthermore, the distinction between the two kinds of grants is well recognised and has been maintained by the Act by specifying in s. 2 (I)( e) that an inam means a grant of a village with exemp-- tion from liability to pay land revenue and also a grant of land revenue only. The appellants' contention would in effect wipe out G this distinction and cannot therefore be accepted.

The appellants then contended that even if their inams were grants of villages exempt from payment of land revenue, sub-s. (5) of s. 17 did not bar their claim because they were not claiming compensation on the ground that the inam villages previously exempted from land revenue had under the Act been made subject to it. They say that they have not been made liable to pay land revenue themselves and are only claiming the loss of the money that they used to collect from the inferior holders, the right to,.

which collection was abolished by the Act. This contention is based -0n s. 5 of the Act which is set out below:

S. 5. (I) All inam villages or in am lands arc and shall be liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder and the provisions of the Code and the rules relating to unalienated land shall apply to such lands.

(2J(a) An inamdar in respect of the inam land in his actual possession or in possession of a person holding from him other than an inferior holder, referred to in clause (b) hclow, or

(b) an inferior holder holding inam land on payment of annual assessment only shall primarily be liable to the State Government for the payment of land revenue, due in respect of such land held by him and shall be entitled to all the rights and shall be liable to all obligations in respect of such land as an occupant under the Code or the rules made thereunder or any other law for the time being in force.

It seems to me that this contention is also without any foundation. The inamdar's right to appropriate to himself the assessment fixed hy the survey and collected from the inferior holders existed Only because he was exempt from the liability to pay land revenue.

If he was not so exempt, then what he collected from the inferior holders would have to be paid over to the Government. It would follow that the loss for which the appellants claim compensation was really occasioned by the lands being subjected to revenue by s. 5(2)(b).

The fact that the inamdar has not himself been made liable for the revenue in respect of the lands held by inferior holders makes no difference. The substance of the matter is that the inamdar has been deprived of his right to the assessment from the inferior holders and the inferior holders have been made liable to pay that assessment to the Government.

So in actual result the inamdar has been deprived of his right to the assessment because the land has been made subject to payment of land revenue.

His claim for the loss of assessment is, therefore, in Teality based on the ground that the lands which were free from revenue ha'e been made subject to it.

Sub-section (5) of s. 17 does not provide that the bar mentioned in it operates only when land revenue is made payable by the inamdar.

It also seems to me that any other interpretation would lead to a result which could not have been intended. It is not in dispute that for the loss of rights in respect of lands in his own pos- H session excepting those mentioned in s. 7 or any lands in possession of persons holding from him other than as inferior holders .an inamdar is not entitled to compensation.

It is adn11tted that

NAVINCHANDRA v. REVENUE TRIBUNAL (Mudholkar, J.) 417

A such compensation could not be allowed in view of s. 17 (5) .

It would be difficult to imagine a reason for the legislature to have made a distinction between such lands and lands in the possession of inferior holders.

The other part of the claim concerns the right to forfeit the inferior holders' tenancies for non-payment of rent and the right of reversion in respect of them. These the appellants have no doubt lost. The Collector asked the appellants to produce evidence in support of their claims under this head. They failed to do so. They could not even cite one instance of the exercise of any such right. It would be impossible to value the loss in respect of them as no material for doing so is on the record nor was furnished by the appellants. No compensation can, therefore, be assessed or awarded for the loss of these rights.

The result is that the appeals fail and they are dismissed. There will be no order as to costs.

Mudholkar, J. These appeals are from a judgment of the Bombay High Court dismissing the writ petitions preferred by the appellants before it. The appellants are co-sharers either in the former Inam village Wanz or in the former lnam village Dindoli, both of which are situate in Surat District. Under the Bombay Personal lnams Abolition Act, 1952 all personal Inams were extinguished and all Inam villages as well as all Inam lands were made liable to the payment of land revenue in accordance with the provisions of the Land Revenue Code. The Act did not provide for compensation to the Inamdars with respect to the loss of their rights to hold their villages or lands free from payment of land revenue. Under s. 10 of the Act, however, compensation to the Inamdars was provided for the extinguishment of certain rights possessed by them in their Inam villages. Those rights vest, by virtue of the provisions of s. 7 of the Act, in the Government.

Section 17(1) of the Act po vi des for payment of compensation to a person aggrieved by the provisions of the Act which abolished, extinguished or modified any of his rights or interests in property provided that compensation for such abolition, extinguishment

or modification of those rights had not been provided for in any of the provisions of the Act. To this provision the following exception has been made in sub-section ( 5):

"Nothing in this section shall entitle any person to compensation on the ground that any inam village or inam land which has wholly or partially exempt from the payment of land revenue has been under the provisions of this Act made subject to the payment of full assessment in accordance with the provisions of the Code."

It is common ground that in both the villages there were holders of land called inferior holders. These were persons claiming through tillers in cultivating possession of different pieces of land in the Inam villages at the time of the grant of the Inams. It is common ground that their rights to continue to be in possession of those lands and cultivate them were left in tact by the lnamdars and the grantees of the lnams were only entitled to claim rents from them.

It is common ground that under s. 216 of the Bombay Land Revenue Code, 1879 settlement was introduced both in Wanz and Dindoli villages though at different points of time.

It is also the common case of the parties that after the introduction of the survey, land revenue was assessed on the lands held by the inferior holders and in place of their liability to pay such rent as may be fixed from time to time by the lnamdars they thenceforward were rendered liable to pay to the Inamdar only the land revenue assessed at the settlement. So far as the Government was concerned the grantees of the villages Wanz and Dindoli were exempt from paying land revenue not only in respect of lands held by the inferior holders but also in respect of lands held by the lnamdars themsel\"es or held by persons holding through the Inamdars.

Now, in consequence of the extinguishment of the right of the lnamdars to hold the villages revenue free they have been rendered liable to pay land revenue to the Government in respect of the lands in their possession or in the possession of persons holding through them.

No liability is, however, cast upon them to pay to the Government land revenue in respect of lands in the possession of inferior holders. This follows clearly from s. 5 of the Act and is not disputed by either set of parties to the appeal.

No compensation is expresse!y provided for the Joss of the right of the lnamdar to recover from the inferior holders land revenue assessed on the lands in their possession. Mr. Padhya contends that the appellants would, therefore, be entitled to claim compensation in respect of this loss under s. 17(1).

He points out that the loss of this right to the lnamdars is not occasioned because of the fact that the lnam villages were made liable to pay full assessment but because the inferior holders have now been required to pay land revenue to the Government instead of to the lnamdars. It is difficult to accept this argument. The relevant provision of the Act for consideration s. 5 which runs thus:

"5(1) All inam villages or inam lands are and shall be liable to the payment of!and revenue in accordance with the provisions of the Code and the rules made thereunder and the provisions of the Code and the rules relating to una!icnated land shall apply to such lands. (2)(a) An inamdar in respect of the inam land in his actual possession or in possession of a person holding from

H •

NAVINCHANDRA v. REVENUE TRIBUNAL (Bachawat, J.) 419

him other than an inferior holder, referred to in clause

(b) below, or

(b) an inferior holder holding inam land on payment of annual assessment only shall primarily be liable to the

State Government for the payment of land revenue due in respect of such land held by him and shall be entitled to all the rights and shall be liable to all obligations in respect of such land as an occupant under the Code or the rules made thereunder or any other law for the time being in force." It is sub-section (I) of this section which creates liability to pay land revenue. Sub-section (2) then proceeds to say as to who is made liable to pay land revenue: the Inamdar or holder from the Inamdar or an inferior holder. Clause (b) of sub-s. (2) which deals with the liability placed on inferior holders has, therefore, to be read with sub-s. (I) and when they are so read it would be clear that the loss resulting to the Inamdar is the direct consequence of the operation of these provisions. In other words it is the direct consequence ofthe provisions of the Act that lands in possession of inferior holders are made liable to pay full assessment "in accordance with the provisions of the Code". This in the context means, liable to pay full assessment to the Government. It is true that by making this provision the Inamdars have sustained loss of one of their rights in property. It is also true that ifs. 17(1) does not apply-as in my view it does not applyno compensation is payable to the Inamdars. However, as no argument has been raised before us that the aforesaid provision of the Act infringes the guarantee incorporated in Art. 31 (I) of the Constitution and is, therefore, unconstitutional the provisions ofs. 5 of the Act must be held to be fully operative.

It was faintly urged by learned counsel that the Inamdar's right of reversion and right of escheathavealso been taken away by the Act and no compensation is provided for it. No provision was, however, brought to our notice by virtue of which it could be said that these rights of the Inamdars have at all been touched by the Act. Even assuming that these rights have been taken away it seems to me that the grounds given by the High Court for rejecting the appellants' claim are cogent and adequate. In the result, therefore, I agree that the appeals be dismissed. I would make no order as to costs.

Bachawat, J. The appellants were holders of shares in inam villages; some held shares in the inam village of Wanz, others held shares in the inam village of Dindoli. The inams were abolished by the Bombay Personal Inams Abolition Act, 1952. By s. 4 of the Act, save as expressly provided by or under the Act, all rights in the inams were extinguished. Sections IO and 17(1) provided for payment of compensation. In view of sub-s. (5) of

SUPREME COURT Rf PORTS

[1966] 3 S.C.R.

s. 17, no compensation can be claimed under sub-s. (I) of s. 17 on the ground that any inam village or inam land which was wholly or partially exempt from payment of land revenue has been under the Act made subject to the payment of full assessment. The appellants filed claims for compensation under ss. 10 and 17 (1) of the Act before the Collector of Surat. We arc now concerned with the following two claims for compensation under s. 17(1) of the Act: (I) loss for the abolition of the right of the appellants to recover assessment from the inferior holders in respect of the lands in their possession; (2) loss for the extinction of the right of reversion and forfeiture in respect of those lands. The Collector of Surat and the Bombay Revenue Tribunal concurrently held that the claim for compensation in respect of the first item was barred bys. 17(5) of the Act and in respect of the claim under the second head, the appellants failed to prove that they sustained any loss.

The appellants filed applications under Arts. 226 and 227 of the Constitution before the High Court at Bombay challenging the correctness of these findings.

The High Court dismissed the applications.

Section 2(1)(c) of the Acl classifies personal inams into two categories. The appellants content that their inams were grants of land revenue and therefore personal inams of the second category specified in s. 2( I )(c)(ii).

In respect of the personal inam of the second category. the bar of s. 17(5) is not attracted. On the other hand, the respondents contend that the inams in question were grants of villages partially exempt from payment of the land revenue, and therefore personal inams of the first category specified in s. 2(1)(c)(i).

In respect of personal inams of the first category, the bar of s. 17(5) is attracted. The High Court held-and, in my opinion, rightly-that the grants of the villages on their trae construction were grants of the soil. The inamdars were not required to pay any land revenue except the quit rent and some small haqs. Consequently, the grants were grants of villages with partial exemption from payment of the land revenue and were personal inams of the first category specified ins. 2(1)(e)(i).

The survey and settlement of the villages under s. 216 of the Land Revenue Code, 1879 made no difference in the character of the inams. The introduction of the survey settlement did not confer on the inferior holders the status of occupants, nor render them liable to pay land revenue to the Government; they continued to be inferior holders under the inamdar and liable to pay the asses.'- ments to him.

In spite of the survey settlement, the villages continued to be alienated villages, and the inams continued to be personal inams of the first c3tegory referred to ins. 2(1)(c)(i) of the Act.

The High Court rightly held that the appellants arc not entitled to claim compensation in respect of the abolition of their

NAVINCHANDRA v. REVENUE TRIBUNAL (Bachawat, !.) 421

right to recover assessment from the inferior holders. The inam lands no longer enjoyed either total or partial exemption from payment of land revenue. By s. 5(1) of the Act, all inam lands are now liable to payment of full land revenue. By s. 5(2)(b), in respect of lands held by inferior holders on payment of assessment only, the inferior holders now enjoy the status of occupants, and are liable to pay the land revenue directly to the State Government. In respect of those lands, the inamdars are neither entitled to collect the assessment from the inferior holders nor liable to pay land revenue to the State Government. Had the appellants' right to recover assessment from the inferior holders not been abolished, they would have been entitled to recover the amounts of assessments from the inferior holders and at the same time would have been liable to pay the identical amounts. to the Government on account of land revenue. The loss consequential on the abolition of the right to recover assessment is, therefore, nil. The claim under this head is really on the ground that the inam lands which were formerly exempt from payment of land revenue have been subjected by the Act to payment of full assessment. Such a claim is barred by s.17(5) of the Act.

With regard to the claim for compensation under the second' head, the High Court rightly held that the appellants could not establish any loss under this head. They failed to show that they exercised any right of forfeiture or claimed any right of reversion at any time. I see no reason for disturbing the finding of the High Court and the Tribunals below on this point.

The appellants submit that in view of the ephemeral nature of their rights of reversion and forfeiture in respect of the lands held by the inferior holders, the grants of villages, as far as they relate to those lands, are assimilated to grants of land revenue. They submit that the High Court and the Tribunals below while holding that the only right of the appellants in respect of those lands was to recover the assessments from the inferior holders, have inconsistently and unjustly held that the grants were grants of inam villages and not of land revenue so as to attract the bar of" s. 17(5). This submission is not well-founded. A grant of a village or land with total or partial exemption from payment of land revenue is essentially different from a grant of land revenue, and the distinction has been preserved by the Act. On the extinction of the grant of land revenue, the inamdar loses all rights in respect of the grant, and he is therefore entitled to full compensation under s. s. 17(1). On the other hand, on abolition of the grant of an inam village or land, the inamdar is allowed to retain and enjoy various rights and benefits arising out of the grant. Section 5(2)(a) gives him the rights of an occupant in respect of lands in his actual possession or in possession of persons holding from him other than

inferior holders. The grants of inam lands, on their true construction, may include the right to mines or mineral products, see Secretary of State for India v. Slzantaram Naravan('), and this right of the inamdar, if any, is preserved hy s. 9 of the Act.

Bys. JO of the Act the inamdar holding inam villages or lands is entitled to compensation in respect of any right or interest in any property referred to ins. 7. He is also entitled to compensation under s. 17(1), but this right is subject to the provisions of s. 17(5).

It will appear, therefore, that the Act treats the inams of the two categories very differently.

While the holder of the inam of the first category referred to in s. 2(1)(e)(i) suffers from the disadvantage of the bar of s. 17 (5) in respect of compensation, he enjoys numerous advantages which are denied to the holder of the inam of the second category referred to ins. 2(1)(e)(ii).

The appeals fail, and are dismissed.

There will be no order as to costs.

Appeals dismissed.

--·--·--- ~(t) (1925) I. L. R. 49 Dom. 99.

BOMBAY REVENUE TRIBU'.'iAL AND ORS

January 21, 1966

A. K. SARKAR, J.

R. MUDHOLKAR

ss. 5, 17(1)

s. 17

Section S of the Act

Sarkar

s. 17(5)

Section S of the Act

s. 17

s. 5

Inamdar

s. 17(5)

Mudholkar

Section 5

s. 5(2)

s. 17(5)

Bachawat

After the Abolition Act

s. 17

s. 17

Bombay High Court

D. B. Padhya

J. B. Nagar

A.G. Ratnaparkhi

S. G. Patwardhan

R. H. Dhebar

Arts. 226 and 227

Bombay Revenue Tribunal

s. 17

S. 17(5)

Bombay Land Revenue Code, 1879

s. 2

s. 17

s. 5

S. 5

s. 5(2)(b)

s. 17

s. 7

s. 17

Wanz

Dindoli

Surat District

s. 10

s. 7

Section 17(1)

s. 216

Bombay Land Revenue Code, 1879

s. 5

Padhya

s. 17(1)

s. 5

Art. 31

s. 4

SUPREME COURT Rf PORTS

[1966] 3 S.C.R.

s. 17

s. 17

ss. 10 and 17

Surat

s. 17(1)

Arts. 226 and 227

High Court at Bombay

Section 2(1)(c)

s. 2( I )(c)(ii)

s. 17(5)

s. 2(1)(c)(i)

s. 17(5)

s. 216

Land Revenue Code, 1879

s. 5(1)

s. 5(2)(b)

s. 17(5)

s. 17(1)

Section 5(2)(a)

s. 9

s. 17(1)

s. 17(5)

s. 2(1)(e)(i)

s. 17


.. ...

AMAR SINGH AND OTHERS

v .

RANA BALBAHADUR SINGH

January 27, 1966

[P. B. GAJENDRAGADKAR, c. J., K. N. WANCHOO, J. c. SHAH,

S. M. SIKRI AND V. RM!ASWAMI, JJ.]

Madhya Pradesh Land Revenue Code, 1954 s. 185(1) ands. 185(3) read with s. 168(2)-lease of ryotwari land prior to commencement of A.ct --Bhumiswami minor on date of lease but not at commencement of Act- Whether belonged to class of disabled persons within the meaning of s. 168(2)-Therefore whether lessee became occupancy tenant under s. 185(1).

Jn 1936, certain ryotwari lands belonging to the estate of the respondent in Madhya Bharat were leased for cultivation to the appellants' father M by the Court of Wards which was in management of the estate. After the Court of Wards released the estate in 1951, the respondent terminated the tenancy 0nd instituted a suit for a decree in ejectment and for mesne profits.

The trial Court passed a decree in the respondent's favour and this was confirmed in appeal by the District Court as well as by the High Court.

It was contended on behalf of the appellants that on the coming into force of the Madhya Pradesh Land Revenue Code, 1954, M acquired the status of an occupancy tenant as he held land of the nature described by s. 185 ( 1). On the other hand it was the respondent's contention that even though a ryotwari sub-lessee might acquire the status of an occupancy tenant; the tenant M was disentitled to that status since at the commence~ ment of the tenancy the respondent, was subject to a disability of the character set out in s. 168(2). Accordingly, the case fell within the exception to s. 185(1) provided in sub-s. (3) of that section.

HELD . By virtue of s. 185 (1), M became an occupancy tenant of the land when the Code was brought into operation; the appeal must therefore be allowed and the respondent's suit dismissed. [426 El

For the exemption from the operation of s. 185 (I) to apply, it had to be established that the respondent at the commencement of the code beloni:ed to the disabled class.

Although being a minor he belonged to the dISabled class at the time when the lease was granted, he did not belon.\l to the di•abled class at the commencement of the Code. What is decisive for the operation of the exemption under s, 185(3) read with G s. 168(2) is the status at the commencement of the code. [425 EJ

Rao Nihalkaran v. Ramgopal [1966] 3 S.C.R. 427; referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 354 of 1965 Appeal by special leave from the judgment and order dated December 18, 1962 of the Madhya Pradesh High Court (Indore H Bench) in Second Appeal No.77 of 1960.

B. R. L. Iyengar, G. L. Sanghi and A. G. Ratnaparkhi, for the appellants. 423 M !~Sup.C. T./66~· 14

SUPREME COURT

RF.PORTS

[ 1966] 3 S.C.R.

S. N. Andley, Rameshwar Narh and P. L. Vo/Ira, for the res- A pondcnt.

B. R. L. Iyengar, G. L. Sanglzi and A. G. Ratnaparklzi, for intervener No. I.

J. B. Dadachanji, 0. C. Mathur and Ra1inder Narain, for interi; encr No. 2.

The Judgment of the Court was delivered by

Shah, J.

Jn 1936 certain home farm land in Mouza Bclam Bujurg, Paragana Burwaha, of the estate of the respondent were leased for culti\'ation to one Mangtya by the Court of Wards which was in management of the estate. The Court of Wards released the estate on June 14, 1951. The respondent thereafter terminated the tenancy and instituted a suit in the Court of Civil Judge, Class IJ, Burwaha, against Mangtya for a decree in ejectment and for mesne profits. The Trial Court decreed the suit for possession and awarded mesne profits at the rate of Rs. 300/- per annum from the date of the decree till delivery of possession. The decree passed by the Trial Court was confirmed in appeal by the District Court, Nimar, and the High Court of Madhya Pradesh. Sons of Mangtya, who died after the judgment of this High Court have preferred this appeal with special leave.

The land in dispute is ryotwari land and Mangtya was a ryotwari sub-lessee of the land. It was contended before the High E Court in Rao Niha/karan v. Ramchandra & Otlzersl that even though a ryotwari sub-lessee of land in the Madhya Bharat region may ordinarily acquire under s. 185 (l)(ii)(b) on the commencement of the Code the status of an occupancy tenant, the tenant Mangtya was disentitled to that status since at the commencement of the tenancy the respondent was subject to a disability of the character set out in s. 168(2). The High Court upheld the plea of the res- F pondent; they held that the expression "holds the land from a Bhumiswami who belongs to any one or more of the classes" predicates two conditions-that the land is held by a tenant under a Bhumiswami, and that at the commencement of the tenancy the landlord who subsequently acquired the status of a Bhumiswami belonged to any one or more of the classes mentioned in sub-s.

(2) of s. 168 of the Code.

The only question which falls to be determined in this appeal is whether under s. 185 (3) of the Madhya Pradesh Land Revenue Code the tenant Mangtya was disqualified from claiming the status of an occupai1cy tenant.

By s. 157 of the Code there was to be in the State of Madhya Pradesh a single clao; s of tenure holders of H land held from the Stte to be known as Bhumiswami. The

(I) L. P. A. No. 14 of 19<ot decided on Sept. 24, 1962.

AMAR SINGH V. R. B, SINGH (Shah, J.) 425

respondent may be by virtue of s. 158(b) deemed to be a Bhumiswami. The rights of a Bhumiswami under the Code .are heritable but in the matter of transfer inter vivas they are subject to restritions prescribed by ss. 165 & 168. Land comprised in the holding of a Bhumiswami may not by virtue of s. 168(1) be transferred by way of a lease, except in the conditions mentioned in sub-ss. (2) & (3) of s. 168. A Bhumiswami subject to one or more of the disabilities mentioned in sub-s. (2) may grant a lease of his holding. It has to be noticed that the provisions which create the tenure of a Bhumiswami and the restrictions thereon are prospective. We have held in Appeal No. 365 of 1965-Rao Niha/karan v.

Ramgopa/(1)-that a person whose tenancy rights were determined before the commencement of the Code will be invested with the status of an occupancy tenant provided he holds land of the nature described in sub-s. (I) of s. 185. But upon this rule is engrafted an exception by sub-s. (3) of s. 185 that nothing in sub-s. (1) shall apply to a person who at the commencement of the Code holds the land from a disabled Bhumiswami.

At the commencement of the Code the respondent acquired the tenure of a Bhumiswami under s. ! 58(b) of the Code, but it cannot be said that the respondent "belongs to any one or more of the classes mentioned in sub-section (2) of section 168". For the exemption from the operation of s. 185(1) it had to be established that the respondent at the commencement of the Code "belongs" to the disabled class. He undoubtedly did belong to the disabled class when the lease was granted, but not at the commencement of the Code, and what is decisive for the operation of the exemption under sub-s. (3) is the status of Bhumiswami at the commencement of the Code. By s. 168(2) the prohibition against a Bhumiswami against transfer by way ofa lease of the land comprised in his holding is inoperative, where the Bhumiswami is subject to any one of the disabilities mentioned in els. (i) to (ix) of sub-s. (2). That provision is undoubtedly prospective. The Legislature has by sub-s. (3} of s. 185 prohibited the acquisition of occupancy tenancy rights by a tenant of a Bhumiswami who was when the Code came into force subject to any of the disabilities mentioned in s. 168 (2). It is clear from the terms of sub-s. (2) of s. 168 proviso 2 that a lease made by a Bhumiswami who is subject to a disability remains valid only during the disability and one year after the determination of that disability, by death or otherwise. Therefore a lease created by a Bhumiswami, even if he was at the date when he created the lease subject to a disability would become invalid on the termination of the disability and a period of one year thereafter. By sub-s. (4) of s. 168 it is provided that a lease granted in pursuance of sub-ss.

(2) or (3) shall be held on such terms and conditions as may be agreed upon between the Jessee and the Bhumiswami and it is further

(!) n966] 3 S.C.R. 427

426 SUPRl!MB COURT REPORTS

(1966] 3 S.C.R.

provided by sub-s. (5) that on the coming into force of the Code where any land is held on lease from a Bhumiswami who belongs to any one or more of the classes mentioned In sub-s. (2) such lease shall, on the coming into force of the Code, be deemed to be a lease granted in pursuance of sub-s. (2). The lease granted by a person who on the commencement of the Code acquires the status of a Bhumiswami is therefore deemed to be a lease granted in pursuance of sub-s. (2) of s. 168, if the Bhumiswami "belongs" to the class mentioned in sub-s. (2).

Reading s. 185(3) with s. 168 (2) and s. 168 (5) it is clear that to attract exclusion from the operation of s. 185 (I) the Bhwniswami must, at the commencement of the Code, be subject to the disability mentioned in sub-s. (2)of s. 168. What is determinative is not the existence of disability at the date of the grant of the lease before the commencement of the Code, but the disability of the Bhumiswami at the commencement of the Code.

On the date on which the Code was brought into force, the respondent was not a Bhumiswami belonging to any one or more of the classes mentioned in sub-s. (2) of s. 168, and the exception provided by s. I 85 (3) will not apply. It is true that the respondent was a minor at the time when the lease was granted by the Court of Wards. But he ceased to be a minor in 1951. By virtue of s. 185 (I) the tenant, notwithstanding the institution of the suit, became an occupancy tenant of the land when the Code was brought into operation and the mere fact that the respondent was a minor at the date of the lease did not prevent the statutory acquisition of the status of an occupancy tenant by Mangtya under s. 185(1).

The appeal must therefore be allowed and the decree passed by the High Court set aside. The suit filed by the respondent will stand dismissed. There will he no order as to costs throughout.

Appeal allowed

AMAR SINGH AND OTHERS

RANA BALBAHADUR SINGH

January 27, 1966

P. B. GAJENDRAGADKAR

K. N. WANCHOO, J.

c. SHAH

S. M. SIKRI

Madhya Pradesh Land Revenue Code, 1954

s. 185(1)

s. 168(2)

s. 168(2)

s. 185(1)

s. 185

s. 168(2)

s. 185(1)

s. 185

s. 185

s. 168(2)

[1966] 3 S.C.R. 427

B. R. L. Iyengar

G. L. Sanghi

A. G. Ratnaparkhi

S. N. Andley

Rameshwar Narh

P. L. Vo

G. L. Sanglzi

A. G. Ratnaparklzi

J. B. Dadachanji

. C. Mathur

Ra1inder Narain

Shah

June 14, 1951

Court of Civil Judge, Class IJ, Burwaha

Mangtya

District Court, Nimar

High Court of Madhya Pradesh

Madhya Bharat

s. 185

s. 168(2)

s. 168

s. 185

Mangtya

s. 157

Madhya Pradesh

Sept. 24, 1962

s. 158(b)

ss. 165 & 168

s. 168(1)

s. 168

s. 185

s. 185

Bhumiswami

section 168

s. 185(1)

s. 168(2)

s. 185

s. 168

s. 168

s. 168

s. 168

s. 185(3)

s. 168

s. 168

s. 185

s. 168

s. 168

s. 185

s. 185(1)