J 2010 SCC OnLine Guj 9794 2011 52 1 GLR 159 2010 Nishitgokhru Mnlumumbaieduin 20231212 195608 1 11

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Letters Patent Appeal No. 932 of 2000
State of Gujarat v. Prathmesh Farms Pvt. Ltd.
2010 SCC OnLine Guj 9794 : (2011) 52 (1) GLR 159 : (2010) 3 GLH 700
In the High Court of Gujarat

(BEFORE D.H. WAGHELA AND BANKIM. N. MEHTA, JJ.)
State of Gujarat & 2 .…. Appellant(s)

v.
Prathmesh Farms Pvt. Ltd. & 1 .…. Respondent(s)
Mr. CB Updhyaya Asstt Government Pleader for Appellants: 1 - 3.
Mr. AJ Patel for Respondent: 1
Mr. AB Munshi for Respondent: 2
Mr. Aspi M. Kapadia as Intervener.
Letters Patent Appeal No. 932 of 2000
In
Special Civil Application No. 1491 of 1999
Decided on August 31, 2010
Tenancy and Land Laws — Bombay Tenancy and Agricultural Lands Act, 1948 — Ss. 2(2)
& (11), 63, and 84-C — Bombay Tenancy and Agricultural Lands Rules, 1956 — S. 36 —
‘Agriculturist’ — Definition of — Juristic person or company if included — Impugned circular
states that permission cannot be granted under the Act for transferring agricultural land to
companies as they were not natural persons — Single Bench quashed the circular holding
that company is a legal entity by referring to Bombay General Clauses Act 1904, the
Gujarat Co-operative Societies Act 1961 and the Gujarat Agricultural Lands Ceiling Act,
1960 — Division Bench set aside the judgement of Single Bench — ‘Agriculturist’ means ‘to
cultivate personally’ and juristic person cannot cultivate personally in the context of Bombay
Tenancy and Agricultural Lands Act’ — Definition of person in the Bombay General Clauses
Act, 1904 will obviously be repugnant in the context of provisions of S. 63 of the Act —
Imposing restrictions on transfer of agricultural lands could hardly accommodate a juristic
person or a company as an agriculturist. — Bombay General Clauses Act 1904 — S. 3(35) —
Gujarat Co-operative Societies Act 1961 — Gujarat Agricultural Lands Ceiling Act, 1960
Cav Judgment
(Per: Honourable Mr. Justice D.H. Waghela)
1. The appellants, State authorities, have preferred this appeal from the judgment
dated 14.3.2000 of learned single Judge of this Court, whereby circular dated
23.11.1998 is quashed and consequently notices at Annexures-I, J and K to the
original petition, based on the aforesaid circular, are also quashed.
2. Respondent No. 1 herein, a private limited company claiming to be in the
profession of cultivation of agricultural land by scientific technology, approached this
Court on the basis of the fact that somewhere in the year 1994-95 several such
farming companies and land-owners had made an application for approval of
registered sale of agricultural land; and on 06.02.1995, Deputy Collector had granted
the necessary permission under section 63 of the Bombay Tenancy and Agricultural
Lands Act, 1948 (for short, the Act) on several conditions. Earlier to that, the State
Government had, on 20.5.1991, issued a letter to the Collector, Ahmedabad to state
that in case of such private limited companies buying agricultural land, income of
managing director should not be considered and permission should be granted under
section 63 of the Act. Thereafter, by the impugned circular dated 23.11.1998,
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instructions were issued to all the Collectors to, in effect, hold that permission cannot
be granted under the Act for transferring agricultural land to companies as they were
not natural persons.
3. Learned single Judge has, in the impugned judgment, culled out the following
two issues and pure questions of law for adjudication and resolution:
“1. Whether the circular dated 23.11.1998 issued by the State Government is
contrary to the provisions of the Bombay General Clauses Act and the provisions of the
Bombay Tenancy and Agricultural Lands Act, 1948?
2. Whether the circular dated 23.11.1998 can be applied retrospectively so as to
deprive the status of agriculturist as had already been conferred at the relevant time
in accordance with the rules?”
Dwelling upon the definition of person as given in the Act, the Bombay General
Clauses Act 1904 and the Gujarat Agricultural Lands Ceiling Act 1960 as also referring
to the scheme of the Act, it was held that, for the purpose of holding the land, it is not
necessary that it can be held only by a natural person and it can certainly be held even
by a juristic person as a legal entity. The Court also held that in no case such
executive circulars could be made applicable retrospectively. In order to appreciate the
submissions of learned counsel against the backdrop of facts which are not in dispute,
it would be advantageous to quote, as under, the relevant parts of the Act:
“The Bombay Tenancy & Agricultural Lands Act, 1948:
An Act to amend the law relating to tenancies of agricultural lands and to
make certain other provisions
in regard to those lands.
WHEREAS it is necessary to amend the law which governs the relations of landlords
and tenants of agricultural lands;
AND WHEREAS on account of the neglect of a landholder or disputes between a
landholder and his tenants, the cultivation of his estate has seriously suffered, or for
the purpose of improving the economic and social conditions of peasants or ensuring
the full and efficient use of land for agriculture, it is expedient to assume management
of estates held by landholders and to regulate and impose restrictions on the transfer
of agricultural lands, dwelling houses, sites and lands appurtenant thereto belonging
to or occupied by agriculturists, agricultural labourers and artisans in the Province of
Bombay and to make provisions for certain other purposes hereinafter appearing; it is
hereby enacted as follows:-
“S. 2 Definitions.
In this Act, unless there is anything repugnant in the subject or context-
(1) ‘agriculture’ includes horticulture, the raising of crops, grass or garden
produce, the use by an agriculturist of the land held by him or a part thereof for the
grazing of his cattle, the use of any land, whether or not an appanage to rice or paddy
land, for the purpose of rab manure but does not include allied pursuits, or the cutting
of wood only:
Provided that in the case of such tracts of land abounding in natural growth of grass
as the State Government may, by notification, in the official Gazette, specify
‘agriculture’ shall include the cutting of grass for any purpose.
(1A) ‘agricultural labourer’ means a person whose principal means of livelihood is
manual labour on land.
(2) ‘agriculturist’ means a person who cultivates land personally.
(5) ‘to cultivate’ with its grammatical variations and cognate expressions means to
till or husband the land for the purpose of raising or improving agricultural produce,
whether by manual labour or by means of cattle or machinery, or to carry on any
agricultural operation thereon; and the expression ‘uncultivated’ shall be construed
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correspondingly.
(6) ‘to cultivate personally’ means to cultivate land on one's own account-
(i) by one's own labour, or
(ii) by the labour of any member of one's family, or
(iii) under the personal supervision of oneself or any member of one's family, by
hired labour or by servants on wages payable in cash or kind but not in crop share.
(6C) ‘to hold land’ as an owner or tenant shall, for the purposes of clause (2D) of
this section and sections 32A, 32B, 34 and 35, mean to be lawfully in actual
possession of land as an owner or tenant, as the case may be.
(7A) ‘joint family’ means an undivided Hindu Family, and in the case of other
persons a group or unit the members of which are by custom joint in estate or
residence;
(8) ‘land’ means
(a) land which is used for agricultural purposes, or which is so used but is left
fallow, and includes the sites of farm buildings, appurtenant to such land; and
(b) for the purposes of sections 11, 16, 17, 17A, 17B, 18, 19, 20, 26, 28, 29, 29A,
30, 41, 43, 63, 64, 64-A, 84A, 84B and 84C-
(i) the sites of dwelling houses occupied by agriculturists, agricultural labourers or
artisans and land appurtenant to such dwelling houses.
(ii) the sites or structures used by agriculturists for allied pursuits.
(11) ‘person’ includes a joint family.
Sec. 63 Transfers to non-agriculturist barred.
(1) Save as provided in this Act-
(a) no sale (including sales in execution of a decree of a Civil Court or for sums
recoverable as arrears of land revenue), gift, exchange or lease of any land or interest
therein, or
(b) no mortgage of any land or interest therein, in which the possession of the
mortgaged property is delivered to the mortgagee, or
(c) no agreement made by an instrument in writing for the sale, gift, exchange,
lease or mortgage of any land or interest therein
shall be valid in favour of a person who is not an agriculturist or who being an
agriculturist cultivates personally land not less than the ceiling area whether as an
owner or tenant or partly as owner and partly as tenant or who is not an agricultural
labourer.
Provided that the Collector or an officer authorised by the State Government in this
behalf may grant permission for such sale, gift, exchange, lease or mortgage, or for
such agreement on such conditions as may be prescribed
Provided further that no such permission shall be granted, where land is being sold
to a person who is not an agriculturist for agricultural purpose, if the annual income of
such person from other sources exceeds five thousand rupees.
(2) Nothing in this section shall be deemed to prohibit the sale, gift, exchange or
lease, or the agreement for the sale, gift, exchange or lease of a dwelling house or the
site thereof or any land appurtenant to it in favour of an agricultural labourer or an
artisan or a person carrying on any allied pursuit.
(3) Nothing in this section shall apply or be deemed to have applied to a mortgage
or any land or interest therein effected in favour of a co-operative society as security
for the loan advanced by such society or any transfer declared to be a mortgage by a
court under section 24 of the Bombay Agricultural Debtor Relief Act, 1947.
(4) Nothing in section 63A shall apply to any sale made under subsection (1).
Sec. 84C. Disposal of land, transfer or acquisition of which is invalid.
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(1) Where in respect of the transfer or acquisition of any land made on or after the
commencement of the Amending Act, 1955 the Mamlatdar suo motu or on the
application of any person interested in such land has reason to believe that such
transfer
or acquisition is or becomes invalid under any of the provisions of this Act, the
Mamlatdar shall issue a notice and hold an inquiry as provided for in section 84B and
decide whether the transfer or acquisition is or is not invalid.
(2) If after holding such inquiry, the Mamlatdar comes to a conclusion that the
transfer or acquisition of land to be invalid, he shall make an order declaring the
transfer or acquisition to be invalid, unless the parties to such transfer or acquisition
give an undertaking in writing that within a period of three months from such date as
the Mamlatdar may fix, they shall restore the land alongwith the rights and interest
therein to the position in which it was immediately before the transfer or acquisition,
and the land is so restored within that period;
Provided that where the transfer of land was made by the landlord to the tenant of
the land and the area of the land so transferred together with the area of other land, if
any, cultivated personally by the tenant did not exceed the ceiling area, the Mamlatdar
shall not declare such transfer to be invalid-
(i) if the amount received by the landlord as the price of the land is equal to or less
than the reasonable price determined under section 63-A and the transferee pays to
the State Government a penalty equal to Re. 1 within such period not exceeding three
months as the Mamlatdar may fix;
(ii) if the amount received by the landlord as the price of the land is in excess of the
reasonable price determined under section 63A and the transferor as well as the
transferee pays to the State Government each a penalty equal to one-tenth of the
reasonable price within such period as may be fixed by the mamlatdar.
(3) ……………
(4) ……………
(5) ……………”
“The Bombay Tenancy and Agricultural Lands Rules, 1956:
Sec. 36. Conditions on which permission for sale etc. of land under section
63 may be granted -
(1) The Collector or officer authorised under the proviso to sub-section
(1) of section 63 shall not grant permission for sale, gift, exchange, lease or
mortgage of any land in favour of a person who is not either an agriculturist or an
agricultural labourer or who, being an agriculturist, cultivates personally land not less
than the ceiling area whether as owner or tenant or partly as owner and partly as
tenant unless any of the following conditions are satisfied:-
(a) such a person bona fide requires the land for a non-agricultural purpose, or
(b) the land is required for the benefit of an industrial or commercial undertaking or
an educational or charitable institution; or
(c) such land being mortgaged, the mortgage has obtained from the Collector a
certificate that he intends to take to the profession of an agriculturist and agrees to
cultivate the land personally; or
(d) the land is required by a co-operative society; or
(e) no agriculturist in the village in which the land is situated who holds lands less
than the ceiling are or no agricultural labourer in such village is prepared to take the
land on lease from the owner; or
(f) the land is required for cultivating it personally by a person, who, not being an
agriculturist, intends to take to the profession of agriculture and to whom the Collector
after having regard to the order of priority mentioned in clause (c) of sub-section (2)
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of section 32P, has given a certificate that such person intends to take to the
profession of agriculture and is capable of cultivating land personally; or
(g) the owner of the land has complied with the provisions of section 64; or
(h) such land is being sold-
(i) in execution of a decree of a Civil Court, or
(ii) for recovering arrears of land revenue or any sums recoverable as arrears of land
revenue under the provisions of the Bombay Land Revenue Code, 1879, and
no agricultural labourer or agriculturist holding land less than the ceiling area is
prepared to bid at such sale; or (ha) such land is required bona fide by a cattle
breeder for the purpose of cattle breeding, or
(i) such land is being given in gift whether by way of trust or otherwise, and such
gift is made bona fide by the owner in favour of a member of his family.
(1A) ………
(2) ………
(3) ………
The Bombay General Clauses Act, 1904:
“Sec. 3 Definitions In” this Act, and in all Bombay Acts or Gujarat Acts made after
the commencement of this Act, unless there is anything repugnant in the subject or
context
“(35) Person” shall include any company or association or body of individuals,
whether incorporated or not.”
(underlines added)
4. Considering the Act in historical perspective, it was seen that prior to enactment
of the Bombay Tenancy Act 1939, the relations between landlords and tenants of
agricultural lands were governed under the Bombay Land Revenue Code, 1879, which
did not secure the rights of tenants who were in inferior position. Even working of the
Bombay Tenancy Act, 1939, as amended in 1946, posed administrative difficulties due
to variety of tenures, customs and usages prevailing in different parts of the Province
of Bombay. The change in the political status of the whole country necessitated a
definite policy of agrarian reforms to achieve improved production and agricultural
efficiency. Therefore, it was considered necessary to assume management of estates
held by landholders and impose restrictions on transfer of agricultural lands to prevent
uneconomic cultivation and to create and encourage peasant proprietorships in respect
of holdings of suitable size.
5. After reference to several earlier circulars and resolutions, the impugned circular
dated 23.11.1998, inter alia, stated: (free English translation) -
It has come to the notice of the Government that some private companies have
purchased agricultural lands for agricultural use after obtaining permission under
section 63 of the Bombay Tenancy Act, 1948. Against purchase of land by private
limited companies for agricultural use, it is submitted that agricultural lands are being
purchased by private limited companies and corporate bodies for speculative purposes.
Thus the above facts came to the notice of the State Government.
The purpose of the Bombay Tenancy Act, 1948 is to ensure holding of agricultural
land by tenants, labourers and agricultural land holders. ‘Agriculturist’ as defined in
sec. 2(2) of the Act means a person who cultivates land personally; and under section
2(6) ‘to cultivate personally’ means to cultivate land on one's own account by one's
own labour, or by the labour of any member of one's family, or under the personal
supervision of oneself or any member of one's family by hired labour or by servants on
wages payable in cash or kind but not in crop share. According to section 2(5), ‘to
cultivate’ with its grammatical variations and cognate expressions means to till or
husband the land for the purpose of raising or improving agricultural produce, whether
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by manual labour or by means of cattle or machinery, or to carry on any agricultural

operation thereon.
Since the word ‘person’ is defined in section 2(11) of the Act, its definition as given
in the Bombay General Clauses Act, 1904 could not be applied and a company
constituted as a juristic person under the Companies Act cannot be considered to be
an ‘agriculturist’ Having regard to this legal provision, there is no provision under
section 63 of the Act for acquisition of agricultural land by companies as non-
agriculturist. The District Collectors, Prant Officers, Taluka Mamlatdars and Agricultural
Tribunals have to proceed accordingly, keeping in view the aforesaid provisions.
6. The above instructions were issued by the impugned circular, by and in the name
of the Governor of Gujarat, for being followed in all the legal proceedings by the
officers concerned.
7. It was argued by learned A.G.P., appearing for the appellant, that the scheme
and provisions of section 63 of the Act clearly conveyed the policy of the legislature,
which was to prohibit transfer of agricultural land in favour of a person who is not an
agriculturist. An exception could be made from the embargo by obtaining permission,
with such conditions as may be prescribed, from the Collector or an officer authorised
in that behalf. However, that exception is subject to the proviso that such permission
cannot be granted where the land is being sold to a person who is not an agriculturist
for agricultural purpose, if annual income of such person from other sources exceeds
5000 rupees. Therefore, it clearly emerges that even the Collector or an officer
authorised in that behalf has no power to permit sale of agricultural land to a person
who is not an agriculturist for agricultural purpose, if the annual income of the buyer
from other sources exceeds 5000 rupees. Agriculturist, by its definition means, a
person who cultivates land personally; and to cultivate personally, the buyer must be
cultivating the land on one's own account or by hired labour under the supervision of
himself or any member of his family. The heading of section 63 viz. ‘Transfers to non-
agriculturists barred’ also clearly indicates the policy of prohibiting transfer of
agricultural land to non-agriculturists, except where such transfer is permitted under
the exceptions provided by the proviso.
8. In view of the express legal provisions of the Act enacted with the express
objects, inter alia, of regulating and imposing restrictions on transfer of agricultural
lands could hardly accommodate a juristic person or a company as an agriculturist.
According to the clear definitions, a legal person cannot cultivate land personally by its
own labour or under personal supervision of itself or its family members. Therefore,
the word person defined in section 2(11) to include a joint family, cannot be allowed
an expansive interpretation so as to include a legal person in the context of the
provisions of section 63 of the Act.
9. As against the above reading of the relevant legal provisions in the impugned
circular, learned single Judge appeared to have unnecessarily strayed into reference to
the provisions of the Bombay General Clauses Act 1904, the Gujarat Co-operative
Societies Act 1961 and the Gujarat Agricultural Lands Ceiling Act, 1960.
10. However, it was reiterated and argued by learned counsel Mr. A.J. Patel,
appearing for the respondent company, that the provisions of the Act must be
harmoniously read with the provisions of other land laws, so as to facilitate modern
and scientific farming by corporate bodies. He relied upon recent decision of the Apex
Court in Ramanlal Bhailal Patel v. State of Gujarat [2008 (3) G.L.R. 1841], wherein the
five appellants along with their respective spouses had purchased 172 acres and 36
gunthas of agricultural land and the land was divided into 10 portions amongst them.
The Mamlatdar had then issued a notice under section 20 of the Gujarat Agricultural
Lands Ceiling Act, 1960 (for short, ‘the Ceiling Act’) and had made declaration under
section 21 of that Act that surplus holding was 1 acre 31 gunthas which shall vest in
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the Government. The matter was taken into suo motu revision under section 37 of the
Ceiling Act and it was held that a group of persons or an association of persons
purchasing agricultural land together had to be treated as a person under that Act
and, therefore, they could jointly hold only one unit (36 acres) and hence he
determined the surplus land as 147 acres 31 gunthas and directed the Mamlatdar to
obtain selection of the land to be surrendered. The Gujarat Revenue Tribunal upheld
the decision of the Deputy Collector and the matter was carried to this High Court.
Learned single Judge allowed the petition and remanded the matter to the Revenue
Tribunal to decide whether the definition of person in the General Clauses Act, 1904
could be imported into the definition of person under the Ceiling Act. The appellants
challenged that order of learned single Judge in appeal. A Division Bench of this Court
allowed the appeal in part by judgment dated 4.3.2003 holding that there was no
need for remand as the pure question of law could be decided by the High Court itself.
It also held that person in the General Clauses Act had to be read into the definition of
person in the Ceiling Act and, therefore, the decision of the Revenue Tribunal treating
the 10 co-owners as an association of persons and consequently a person for the
purpose of the Ceiling Act entitled them to hold only one unit (36 acres). That order of
the Division Bench was under challenge before the Apex Court. And in that context,
the Apex Court identified the issues as under:
“(i) Whether the definition of ‘person’ in the Gujarat Agricultural Lands Ceiling Act,
1960, includes a body of individuals/association of persons ?”
(ii) Whether co-ownership, per se, is an ‘association of persons/body of individuals’
and therefore, constitutes a ‘person’?
(iii) Whether the ten purchasers, who became co-owners of the land, together
constitute a ‘body of individuals/association of persons’ and therefore a ‘person’ within
the meaning of that expression in the Ceiling Act?
(iv) Whether the partition dated 30-12-1971 among the co-owners is ‘deemed to
have been made in anticipation to defeat the object of Gujarat Agricultural Lands
Ceiling (Amendment) Act, 1972’ under section 8(1) of the Ceiling Act; and if so what
is the effect of failure to make an application under sub-section (2) of section 8 of the
Ceiling Act.
(v) What would be the position if some of the co-owners were non-agriculturists at
the time of purchase of the lands? Whether the Mamlatdar can examine this issue
when considering the question of surplus land under the Ceiling Act?”
The Ceiling Act, in substance, prohibited holding of agricultural land by any ‘person’
as owner or tenant, in excess of the ceiling area. The word person as defined in section
2(21) in the Ceiling Act is also an inclusive and identical definition, i.e. person
includes a joint family. Against such backdrop, the Apex Court observed:
“25. Both definitions of the word ‘person’, in General Clauses Act and Ceiling Act,
are inclusive definitions. The inclusive definition of ‘person’ in General Clauses Act
applies to all Gujarat Act unless there is anything repugnant in the subject or the
context. The inclusive definition of person in section 2(21) of the Ceiling Act, does not
indicate anything repugnant to the definition of person in General Clauses Act, but
merely adds ‘joint family’ to the existing definition. Therefore the definition of ‘person’
in the Ceiling Act, would include the definition of person in section 3(35) of General
Clauses Act. The resultant position can be stated thus: The definition of person in
General Clauses Act, being an inclusive definition, would include the ordinary, popular
and general meaning and those specifically included in the definition. The inclusive
definition of person in the Ceiling Act, in the absence of any exclusion, would have the
same meaning assigned to the word in the General Clauses Act, and in addition, a
‘joint family’ as defined. Thus, the word ‘person’ in the Ceiling Act will, unless the
context otherwise requires, refer to:
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(I) a natural human being

(ii) any legal entity which is capable of possessing rights and duties, including any
company or association of persons or body of individuals (whether incorporated or
not); and
(iii) a Hindu Undivided Family or any other group or unit of persons, the members
of which by custom or usage, are joint in estate and residence”
10.1 However, the Court also held that the Tribunal and the High Court were right
in holding that the word ‘person’ in the Ceiling Act includes an association of
persons/body of individuals; but they were not justified in treating the co-owners as
an association of ‘persons’, or in holding that the ten co-owners will be entitled to own
only one unit.
Thus, holding that the ten co-owners together were not to be treated as a ‘person’
the Apex Court directed as under:
“35. The Mamlatdar will have to decide the matter by holding an enquiry under
section 21 of the Ceiling Act keeping in view the principles laid down in sections 6 to 8
of the Ceiling Act. Further section 63 of the Tenancy Act also has to be kept in view
while examining the claim of co-owners. If the sale was effected jointly in the name of
ten persons to enable some non-agriculturists who were barred from buying
agricultural land, to buy agricultural land by joining some agriculturists as co-
purchasers, the sale to the extent it is in favour of non-agriculturists will not be valid
and the consequences on account of sale not being valid for violation of section 63 of
Tenancy Act will follow as provided in section 84C of that Act. For example if ten
purchasers purchase hundred acres of land with equal shares, and six of them are non
-agriculturists, then the sale in respect of the six nonagriculturists (to an extent of 60
acres) will not be valid and such land purchased by non-agriculturists may have to
vest in the State Government as provided in section 84C of the Tenancy Act. In this
case no such enquiry has been held to find out about the validity of the sale.
Therefore, the matter will have to be remitted to the Mamlatdar to hold an enquiry
under sections 63 and 84C of Tenancy Act to decide whether all the purchasers were
agriculturists who were entitled to purchase agricultural land and whether transfer in
favour of all of them is valid or invalid and to make consequential orders”
(underlines added)
10.2 Obviously, reliance by the respondent on the above judgment is misplaced
and actually undermines the case of the respondent. Besides that, the Tenancy Act
and the Ceiling Act, though dealing with agricultural land, have totally different
purposes and the context in which the word ‘person’ is used in various provisions
thereof is equally different. While the avowed object of the Ceiling Act is to place
restrictions upon holding of agricultural land in excess of certain limits, the object of
the Tenancy Act, inter alia, is to regulate and restrict transfer of agricultural lands held
by agriculturists, agricultural labourers and artisans to non-agriculturists or for non-
agricultural purpose. Besides that, the clear restrictions contained in section 63 of the
Tenancy Act prohibits, subject to the exceptions, transfer of agricultural land to non-
agriculturists (for agricultural purpose), which has to exclude legal ‘persons’ or bodies
incorporate, who, in the nature of things, cannot ‘personally cultivate’ land as per
definition of that phrase in the Act. The phrase ‘if actual income of such person from
other sources exceeds 5000 rupees’ attaching to the transferee entity cannot be
applied to make a person agriculturist who cannot be an agriculturist. The definition of
person in the Bombay General Clauses Act, 1904 will obviously be repugnant in the
context of provisions of Section 63 of the Act, and, therefore, it could not be read as
incorporated in the definition of ‘person’ in the Act.
11. The other decision of the Apex Court relied upon for the respondent, viz. Shri
Kalanka Devi Sansthan v. Maharashtra Revenue Tribunal, Nagpur[(1969) 2 SCC 616]
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also cannot carry the case of the respondent any further. The question in that case was
whether the Sansthan can claim possession of land from tenant on the ground of
personal cultivation. And it was held as under:
“4. ……The idol is capable of holding property in the same way as a natural person.
“It has a juridical status with the power of suing and being sued. Its interests are
attended to by the person who has the deity in his charge and who is in law its
manager with all the powers which would, in such circumstances, on analogy, be given
to the manager of the estate of an infant heir”. The question, however, is whether the
idol is capable of cultivating the land personally. The argument raised on behalf of the
appellant is that under Explanation I in Section 2(12) of the Act a person who is
subject to any physical or mental disability shall be deemed to cultivate the land
personally if it is cultivated by the servants or by hired labourer. In other words an idol
or a Sansthan that would fall within the meaning of the word “person” can well be
regarded to be subject to a physical or mental disability and land can be cultivated on
its behalf by servants or hired labourers. It is urged that in Explanation (I) the idol
would be in the same position as a minor and it can certainly cultivate the land
personally within the meaning of Section 2(12). It is difficult to accept the suggestion
that the case of the appellant would fall within Explanation (I) in Section 2(12).
Physical or mental disability as defined by S. 2(22) lays emphasis on the words
“personal labour or supervision”. As has been rightly pointed out in Shri Kesheoraj Deo
Sansthan, Karanja v. Bapurao Deoba, 1964 Mah LJ 589 in which an identically similar
(sic) point came up for consideration, the dominating idea of anything done personally
or in person is that the thing must be done by the person himself and not by or
through someone else. In our opinion the following passage in that judgment at p. 593
explains the whole position correctly:
“It should thus appear that the legislative intent clearly is that in order to claim
cultivation as a personal cultivation there must be established a direct nexus between
the person who makes such a claim, and the agricultural processes or activities carried
on the land. In other words, all the agricultural operations, though allowed to be done
through hired labour or workers must be under the direct supervision, control, or
management of the landlord. It is in that sense that the words “personal supervision”
must be understood. In other words, the requirement of personal supervision under
the third category of personal cultivation provided for in the definition does not admit
of an intermediary between the landlord and the labourer, who can act as agent of the
landlord for supervising the operations of the agricultural worker. If that is not possible
in the case of one landlord, we do not see how it is possible in the case of another
landlord merely because the landlord in the latter case is a juristic person”
In other words the intention is that the cultivation of the land concerned must be by
natural persons and not by legal persons.
It is further held in para 6 as under:
“6. It has lastly been contended that the relevant provisions of the Act which have
the effect of debarring the appellant from claiming possession for personal cultivation
violate the provisions of Articles 14 and 19(1)(f) of the Constitution. It is urged that
discrimination is writ large between animate and juristic persons who fall within the
definition of the word “person”. Such a contention, however, cannot be entertained in
view of Article 31-A of the Constitution. The Act had received the assent of the
President and is rendered immune from attack or challenge on the ground of violation
of Articles 14 or 19 of the Constitution. In Mahadeo Paikaji Kolhe Yavatmal v. State of
Bombay, (1962) 1 SCR 733 = (AIR 1961 SC 1517) the constitutional validity of the
Act itself was canvassed but the challenge failed. Similarly the validity of the Bombay
Tenancy and Agricultural Lands Amendment Act, 1956 as applied to Vidarbha Region
and Kutch Area was upheld in Sri. Ram Ram Narain Medhi v. The State of Bombay,
-----------------------------------------------------------------------------------------------------------------------------------------------------------
(1959) (Supp) 1 SCR 489 = (AIR 1959 SC 459).”

It may be pertinent to note here that the restriction on transfer of agricultural land
to non-agriculturist, under the pain of invalidation of such transfer, as envisaged in the
provisions of Section 63 of the Act, is different from and totally unrelated to the legal
capacity of a body corporate to ‘hold’ agricultural land. Even if it were held in a
particular context that a juristic person could legally ‘hold’ or ‘own’ agricultural land, it
cannot be construed as a licence to transfer the land to such artificial person in spite of
its incapacity to personally cultivate the land as required under the Act.
12. Learned counsel for the respondent also relied upon the observations made by
the Apex Court in Consolidated Tea and Lands Co. (India) Ltd. v. Commissioner of
Wealth Tax, West Bengal [AIR 1970 Calcutta 335]. In the facts of that case, several
questions were referred to the Apex Court under section 27(1) of the Wealth Tax Act,
1957 and the only relevant observation made by His Lordship Justice Sabyasachi
Mukharji was:
“9. Our attention was drawn to the observations of Banerjee, J. in the case of
(1968) 67 ITR 823=(AIR 1968 Cal 298) (supra), to the effect that a company cannot
be a cultivator under section 2(e) of the Act. It was however contended that the
aforesaid observations of Banerjee J., in that case were obiter. In the view I have
taken of the expression outhouse, I do not think it necessary for me to express any
views on this controversy in this case. The question then that requires our
consideration is, can these buildings be considered as outhouses? The expression
outhouse has not been defined in the Act.
While agreeing with the above answer, Hon'ble Justice P.B. Mukharji observed as
under:
14. This reference has caused me some anxious moments. At the same time, I do
not feel that my anxiety and hesitation need be pressed to a dissent. In the facts and
circumstances, I agree with the answers given.
15 to 18 …. …. ….
19. It is well-settled principle of interpretation of statutes that the interpretation
given to the word used in one statute should not be applied to interpreting that word
or a similar word used in a different statute with a different purpose and a different
context. Words like ideas have a certain association which is provided by the context,
the object and the purpose of the statute in which it is used. One of the main and
basic objects of the Wealth Tax Act is the valuation of assets and consideration of
assets.
20 to 22 …. …. ….
23. There is more cogent reason to include a company in the interpretation of the
word cultivator in that section of the Act. That
reason is that a company or an incorporated company is an assessee and its assets
are liable to be taxed under the Wealth-tax Act. But this kind of an interpretation
confining cultivator to a human cultivator and excluding a non-human cultivator, like
an artificial person such as a company, would be to retain its liability to the tax and
deprive it of the claim to get the exemption. Normally, no construction should be put
on a taxing statute which will deprive a legally liable assessee to make a claim for
exemption. Liability to tax and exemption should be co-related as far as possible,
unless there is any specific provision in the statute, expressly or by necessary
implication, to justify their separation. It is a kind of deprivation which the Court
should be slow to adopt by a process of construction and interpretation.
24. Section 3 of the Wealth-tax Act, which is the charging section in the statute,
uses the word company expressly as a possible unit of taxation. Section 2(c) itself,
clause (e)(ii) of which is under consideration, expressly defines an assessee to mean a
person by whom inter alia the wealth-tax is payable under the Act. A person includes a
-----------------------------------------------------------------------------------------------------------------------------------------------------------
company or any corporation under section 3(39) of the General Clauses Act. Then,
again the principle underlying this Wealth-tax Act is to be read in the light of the basis
of exemption. The principal basis of exemption is that the agricultural land is
exempted by the definition of assets under sec. 2(e)(i) and (ii). If the interpretation
quoted above were to be accepted, the position then will be that while the agricultural
land owned by the company is exempted, its dwelling house is not, on the view that a
company cannot have a dwelling house in the sense that a human being can ………
Above observations cannot be torn from the context in which they are made and
cannot be applied in the context of the present matter.
12.1 When material words are capable of bearing two or more constructions, the
most firmly established rule for construction is the rule laid down in Heydon's case,
which is also known as purposive construction or mischief rule. Court is required to
make such construction as shall suppress the mischief and advance the remedy, and
suppress certain inventions and evasions for continuance of the mischief, and pro
privato commodo, and to add force and life to the cure and remedy, according to the
true intent of the makers of the Act, pro bono publico, as discussed in several
judgments of the Apex Court, including Bengal Immunity Co. v. State of Bihar [AIR
1955 SC 661] and Ameer Trading Corporation Ltd. v. Shapoorji Data Processing Ltd.
[AIR 2004 SC 355]. In the words of Lord Griffith: The courts now adopt a purposive
approach which seeks to give effect to the true purpose of legislation and are prepared
to look at much extraneous material that bears on the background against which the
legislation was enacted. [Pepper v. Hart (1993) 1 All ER 42
13. In view of the above discussion of the relevant legal provisions and the ratio of
the judgments of the Apex Court, it is clear that the impugned circular dated
23.11.1998 was in consonance with the relevant provisions of the Act and the Rules
made thereunder and the notices issued on the basis of that circular could not be
quashed as the authorities were entitled and required to initiate proceeding under
section 84-C of the Act, even without reference to and reliance upon the impugned
circular. In that view of the matter, whether the impugned circular could have
retrospective effect or not becomes irrelevant as the law as interpreted by the Court
must take its own effect and must be implemented accordingly regardless of any
particular interpretation put upon it by the implementing agencies or the date on
which such administrative interpretation is handed out for necessary actions in
accordance with the Act.
14. Accordingly, the appeal is allowed, the impugned judgment is set aside and the
circular and the notice impugned in the original petition are upheld, without prejudice
to the rights and contentions which may otherwise be available to the respondent.
Upon pronouncement of the judgment today, learned counsel Mr. Shital Patel,
appearing with learned counsel Mr. A.J. Patel, and learned counsel Mr. A.B. Munshi,
requested that operation and implementation of this judgment may be stayed for a
period of six weeks. We do not find any justification for granting such relief. Therefore,
the request is rejected.
———
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Page 1 Tuesday, December 12, 2023

Letters Patent Appeal No. 932 of 2000

State of Gujarat v. Prathmesh Farms Pvt. Ltd.

In the High Court of Gujarat

State of Gujarat & 2 .…. Appellant(s)

by manual labour or by means of cattle or machinery, or to carry on any agricultural

(I) a natural human being

(1959) (Supp) 1 SCR 489 = (AIR 1959 SC 459).”

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