Sunday 25 August 2013

Whether Fragment can be transferred to owner of contiguous survey number or an owner of a recognised sub-division of a survey number?


 Shri Andhyarujina, the learned Advocate-General, while defending the vires of section 7(1) of the Act, has taken us through the salient provisions of the Act. He has pointed out that the Act has been brought into force to prevent fragmentation of agricultural holdings and to provide for better cultivation thereof. The object of the Act is to avoid fragment which are often brought about by transfers, which is destructive of agricultural efficiency. The Act aims at consolidation of a fragments into standard areas so as to achieve more and better agricultural produce. According to Shri Andhyarujina, the provision of section 7 of the Act does not lay down a rule of pre-emption by vicinage. It does not confer a right on an adjoining land-holder to purchase an adjoining holding. All that section 7 of the Act seeks to do is to prohibit a transfer of a fragment to a person other than an owner of a contiguous survey number or an owner of a recognised sub-division of a survey number. What section 7 of the Act seeks to do is to permit the amalgamation of a fragment into an adjoining holding so as to make it into a standard holding rather than confer a right on an adjoining holder to purchase the property. The concerned provision aims at achieving maximum agricultural output. The provision is in respect of an agricultural land and the same cannot be impugned even if the provisions of Article 19(1)(f) of the Constitution has continued to hold the field.
5. Section 2(4) of the Act defines "fragment" to mean a plot of land of less extent than the appropriate standard areas determined under the Act. Section 2(5) of the Act defines "land" to mean agricultural land, whether alienated or unalienated. Section 2(6) defines "local area" to mean any area notified as such in the Official Gazette under section 3 of the Act. Section 2(10) of the Act defines "Standard area" in respect of any class of land to mean the area which the State Government may from time to time determine under section 5 as the minimum area necessary for profitable cultivation in any particular local area, and includes a standard area revised under the said section.

Bombay High Court
Mallu Tatya Suryavanshi vs Shripati Rama Gondhali And Ors. on 10 October, 1994
Equivalent citations: 1995 (2) BomCR 544

Bench: A Agarwal, K Baam



1. The property in dispute is an agricultural land bearing Gat Nos. 1550 and 1551, admeasuring 0.51 Ares, situate in Village Erandole, Taluka Miraj, District Sangli. Under a sale-deed dated May 12, 1980, the petitioner has purchased the same from respondent No. 2. The said land is a fragment within the definition of the term "Fragment" under sub-section (4) of section 2 of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947 (hereinafter referred to for the sake of brevity as "the Act"). The petitioner not being an owner of a contiguous survey number, the validity of the transaction under section 7(1) of the Act falls for our consideration in the present writ petition.
2. A further question that has fallen for our consideration in the present writ petition is in respect of the vires of section 7 of the Act. The question has been raised by the earlier Division Bench, which seized of the matter (Coram : A.M. Bhattacharjee, C.J. & V.P. Tipnis, J.), who by order passed on June 28, 1994 raised the following issue and issued notice to the learned Advocate-General to answer the question of the vires and validity of section 7(1) of the Act. The Division Bench observed :
"During the course of the argument, a question arose as to whether section 7(1) of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947, providing that no person shall transfer any fragment except to the owner of a contiguous survey number or recognised sub-division of a survey number is ultra vires the provisions of the Constitution. We have taken note of two decisions of the Supreme Court in Bhau Ram v. Baij Nath Singh, and in Sant Ram v. Labh Singh,
which have held that the right of presumption, whether granted by statuse, or by custom, was ultra vires Article 19(1)(f) and Article 19(5) of the Constitution as it stood then. The provisions of Article 19(1)(f) have no doubt thereafter been deleted by the Constitution (Forty-fourth Amendment Act, 1978), but even then, the question would arise whether right of presumption would still be ultra vires Article 14 and Article 21 of the Constitution as being unreasonably oppressive so far as the seller is concerned as the same may compel him to sell properties at a depressed price. The further question that arose was whether the right, which was guaranteed under Article 19(1)(f) shall, after its deletion, be deemed to be comprised within the rights relating to personal liberty as guaranteed in Article 21. As this case involves these important questions of law relating to the vires of section 7(1) and other allied provisions of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947, we have thought it fit to issue notice to the learned Advocate-General of the State to appear and to assist us in disposing of the matter. Let notice be issued to the learned Advocate-General accordingly. Petition to be listed for hearing on 26th July, 1994."
In response to the notice, the learned Advocate-General has appeared and has argued the matter in respect of the vires of section 7 of the Act.
3. As already noted, the land in question is an agricultural land. It admeasures 0.51 Aeres. It is, undisputedly, a fragment and is recorded as such in the record of rights. The said land originally belonged to and stood in the name of original respondent No. 2 Shri Narayan Maruti Gondhali, who expired during the pendency of the proceedings leaving behind him respondents Nos. 2(a) and 2(b) as his heirs and legal representatives. Narayan during his lifetime on May 12, 1980 conveyed the property to the petitioner for a sum of Rs. 18,000/-. Respondent No. 1 is the owner of an adjoining survey number; whereas the petitioner is not. Respondent No. 1, therefore, filed an application under section 9 of the Act for declaration that the transfer in favour of the petitioner is void as the same is in contravention of section 7(1) of the Act. Respondent No. 1 claimed a right to purchase in preference to the petitioner. By a judgment and order passed on September 8, 1981, the Sub-Divisional Officer, Miraj Division, Miraj, before whom the application was filed, was pleased to hold that the sale-deed was not void under section 7 of the Act as the same was in respect of an entire Gat number. According to the Sub-Divisional Officer, the transaction was covered by section 31(3)(iii) and the same was not hit by section 7 of the Act. Consequent upon his findings, the Sub-Divisional Officer declined to cancel the sale-deed executed in favour of the petitioner. Taking exception to the above order, respondent No. 1 carried the matter in revision before the Additional Commissioner, Pune Division, who, by his judgment and order passed on February 3, 1984, found that the provisions of section 31(3)(iii) of the Act were not attracted and the sale-deed was hit under section 7 of the Act. He, therefore, set aside the order passed by the Sub-Divisional Officer. The order passed by the Additional Commissioner, Pune Division is impugned in the present writ petition.
4. Shri Andhyarujina, the learned Advocate-General, while defending the vires of section 7(1) of the Act, has taken us through the salient provisions of the Act. He has pointed out that the Act has been brought into force to prevent fragmentation of agricultural holdings and to provide for better cultivation thereof. The object of the Act is to avoid fragment which are often brought about by transfers, which is destructive of agricultural efficiency. The Act aims at consolidation of a fragments into standard areas so as to achieve more and better agricultural produce. According to Shri Andhyarujina, the provision of section 7 of the Act does not lay down a rule of pre-emption by vicinage. It does not confer a right on an adjoining land-holder to purchase an adjoining holding. All that section 7 of the Act seeks to do is to prohibit a transfer of a fragment to a person other than an owner of a contiguous survey number or an owner of a recognised sub-division of a survey number. What section 7 of the Act seeks to do is to permit the amalgamation of a fragment into an adjoining holding so as to make it into a standard holding rather than confer a right on an adjoining holder to purchase the property. The concerned provision aims at achieving maximum agricultural output. The provision is in respect of an agricultural land and the same cannot be impugned even if the provisions of Article 19(1)(f) of the Constitution has continued to hold the field.
5. Section 2(4) of the Act defines "fragment" to mean a plot of land of less extent than the appropriate standard areas determined under the Act. Section 2(5) of the Act defines "land" to mean agricultural land, whether alienated or unalienated. Section 2(6) defines "local area" to mean any area notified as such in the Official Gazette under section 3 of the Act. Section 2(10) of the Act defines "Standard area" in respect of any class of land to mean the area which the State Government may from time to time determine under section 5 as the minimum area necessary for profitable cultivation in any particular local area, and includes a standard area revised under the said section.
6. Section 3 of the Act provides that the State Government may, after such inquiry as it deems fit, by notification in the Official Gazette, specify a village, mahal or taluka or tahsil or any part thereof as a local area for the purposes of the Act. Section 4(1) of the Act provides that the State Government may, after such inquiry as it deems fit and after consultation with the District Advisory Committee or any other body appointed by it, provisionally settle for any class of land in any local area the minimum area that can be cultivated profitably as a separate plot. Section 5 of the Act deals with the powers of the State Government, after considering the objections, if any, received and after such further enquiry as it may deem fit, to determine the standard area for each class of land in such local area. Sub-section (2) of section 5 of the Act empowers the State Government to revise the standard area. Section 6 of the Act deals with the making of entry in the record of rights in respect of all fragments after notifying the standard area. Then comes section 7(1), which is the section in issue in this writ petition. It provides :-
"7(1) No person shall transfer any fragment in respect of which a notice has been given under sub-section (2) of section 6 except to the owner of a contiguous survey number or recognised sub-division of a survey number :
Provided that the holder of such fragment may mortgage or transfer it to the State Government or land mortgage bank or any other co-operative society as security for any loan advanced to him by the State Government or such bank or society, as the case may be.
(2) Notwithstanding anything contained in any law for the time being in force nor in any instrument, or agreement, no such fragment shall be leased to any person other than a person cultivating any land which is contiguous to the fragment."
Further provisions which seek to prohibit creation of fragment is contained in section 8 of the Act. Section 8 of the Act provides that no land in any local area shall be transferred or partitioned so as to create a fragment. Section 8AA provides for restriction on partition of land which results in the creation of a fragment. Section 9 makes transfer or partition made contrary to the provisions of the Act penal and the same are also made void. Section 10 of the Act, however, permits an owner of a fragment to transfer a fragment to the State Government on payment by the State Government of such compensation as the Collector may determine. On such payment being made, the fragment will stand transferred to the State Government, but no such fragment is permitted to be transferred to the State Government unless it is first offered to the owner of a contiguous survey number or recognised sub-division of a survey number on payment of the compensation determined by the Collector and such owner has refused to purchase the frangment on payment of such compensation.
7. Chapter III of the Act deals with the procedure for consolidation. Section 15 of the Act enables the State Government, of its own accord or on an application, to declare its intention to make a scheme for consolidation of holdings. The succeeding sections deal with the preparation of scheme for consolidation of holdings and for payment of compensation, etc.
8. Section 31 of the Act, on which reliance is placed on behalf of the petitioner, deals with restrictions on alienation and sub-division of consolidated holdings. Sub-section (1) of section 31 of the Act provides :-
"31(1)Notwithstanding anything contained in any law for the time being in force, no holding allotted under this Act, nor part thereof shall save as otherwise provided in this section :---
(a) be transferred whether by way of sale (including sale in execution of a decree of a Civil Court or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue) or by way of gift, exchange, lease, or otherwise; or
(b) be sub-divided, whether under a decree or order of a Civil Court or any other competent authority or otherwise, so as to create a fragment without the previous sanction of the Collector. Such sanction shall be given by the Collector in such circumstances and subject to such conditions as may be prescribed."
Sub-section (3)(iii) of section 31, on which reliance is placed, provides :-
"(3) Nothing in sub-section (1) shall also apply to any land which is to be transferred :---
(i) ......................................................
(ii) ......................................................
(iii) to an agriculturist or agricultural labourer in its entirety."
9. The above salient features, to which our attention has been drawn by the learned Advocate-General, show that no right of pre-emption by vicinage is conferred by the Act. All that is sought to be banned is to prevent transfer of a frangment so that it continues to remain a fragment. The provisions of the Act seek to enlarge fragments into standard areas so as to render them fit for better cultivation. Absolute bar is not created for transfer; transfer to a contiguous holder is permitted. A transfer by way of security for a loan is made permissible to the State Government, or a land mortgage Bank or a co-operative society as is provided under the proviso to section 7(1) of the Act. A transfer is made permissible to the State Government if an owner of a contiguous holding refuses to purchase as is provided under section 10(1) of the Act. There is no provision in the Act which entitles a contiguous holder to claim an assignment in his favour on ground of vicinage. In the circumstances, we do not find that the provisions of section 7(1) are ultra vires Article 19(1)(f) of the Constitution of India as it then provided.
10. We will now refer to the two decisions of the Supreme Court. The first one is the case of Bhau Ram v. Baij Nath Singh, ; and the other of Sant Ram v. Labh Singh,
. The case of Bhau Ram, (supra) deals with the vires of section 16 of the Punjab Pre-emption Act, 1913. This is what Supreme Court has observed :-
"(3) The question therefore that arises is whether a right of pre-emption by vicinage offends Article 19(1)(f). There has been divergence of opinion between various High Courts on this question. The High Courts of Rajasthan, Madhya Bharat and Hyderabad and the Judicial Commissioner Vindhya Pradesh have taken the view that such a right of pre-emption offends Article 19(1)(f) while the High Court of Punjab has held otherwise. Before, however, we deal with the main points urged in this case, we may notice the arguments based on the decision of this Court in Audh Behari Singh v. Gangadhar Jaipuria, where it was held that the law of pre-emption
creates a right which attaches to the property and on that footing only it can be enforced against the purchaser. The argument is that since the right of pre-emption attaches to the property sold it is an incident of property, and therefore cannot be held to be a restriction on the right to acquire, hold and dispose of property. On the other hand, it is urged that if the law of pre-emption creates a right which is an incident of property, even so, it would be a restriction created by law on the fundamental right guaranteed under Article 19(1)(f) of the Constitution. We are of the opinion that even if the law of pre-emption creates a right which attaches to property, it would be creating a restriction so far as the acquiring, holding or disposing of property is concerned which was not there before the law of pre-emption was enacted. Therefore, even if the liability attaches to the property, it will still amount to a restriction on the right guaranteed by Article 19(1)(f), when it attaches the property by the law of pre-emption.
"(4) Article 19(1)(f) gives a fundamental right to a citizen to acquire, hold and dispose of property and Clause 5 of that Article permits reasonable restrictions to be imposed by law on this right in the interest of the general public. There can be no doubt that a law of pre-emption does impose restriction on the fundamental right guaranteed under Article 19(1)(f) and the question is whether the restriction imposed in the Rewa case is reasonable and in the interest of the general public. Section 10 of the Rewa Act applies to all kinds of property, whether urban or rural, and whether agricultural land or house property, and it is in that context that its reasonableness will have to be judged. There is nothing to show in this case that there was any pre-existing custom of a similar nature prevalent in any part of the area to which the Rewa Act applies, and even if any custom was prevalent in any area, there is nothing to show what precisely that custom was. In any case, even if any custom was prevalent in this area before the Rewa Act came into force and it was held reasonable by courts, that would not, in our opinion, be a decisive factor in considering whether the restrictions imposed by the Rewa Act are reasonable or not. We have to judge the reasonableness of the law in the context of the fundamental rights which were for the first time conferred by the Constitution on the people of this country and which were not there when the courts might have considered the reasonableness of the custom, if any, in the context of things then prevalent. Nor do we think that the fact that the right of pre-emption may not be actually exercised in the case of even a larger number of sales can have any bearing on the question whether the law imposing restriction is reasonable or not."
The Supreme Court has further gone on to add :-
"(8) It is urged, however, that at any rate, in the case of agricultural properties, pre-emption by vicinage results in consolidation of agricultural lands, and that at any rate is an advantage. How far the argument of consolidation can be availed of now when we find that in most States laws are being passed which are putting ceilings on agricultural holdings is a matter which it is unnecessary to consider in the present case, for the Rewa Act applies not only to agricultural holdings but also to urban property including house property. There is no question of any advantage arising out of consolidation where one is dealing with urban property or house property. The matter of consolidation might have had some bearing if the Rewa Act was applicable to agricultural lands only. But as it applies to urban lands as well as house property where no question of consolidation of holding arises, the impugned provision cannot be held to be a reasonable restriction in the interest of the general public on the ground that it leads to consolidation of agricultural holdings. There is no way of severing the application of the law so far as it relates to agricultural holding from its application to urban or house property and therefore the entire provision as to vicinage must fall, even if something could be said in its favour with respect to agricultural holdings on the ground of consolidation. We are therefore of opinion that the second clause of section 10 imposes an unreasonable restriction on the right to acquire, hold or dispose of property guaranteed under Article 19(1)(f) of the Constitution and must be struck down. So far as the proviso is concerned it applies both to the first and the second clauses and it will survive for the purposes of the first clause only, which is not in dispute before us."
It would thus appear that as far as the legislation in respect of agricultural property is concerned, the same is found to hold good as pre-emption by vicinage results in consolidation of agricultural lands, bringing about better agricultural yield. The authority in question related to urban and house property as well and not only in respect of agricultural land; and the latter observations reproduced above indicate that as far as agricultural lands are concerned, they are treated on an entirely different footing. A provision of pre-emption in respect of agricultural land is found to be good and justified on the ground that it results in consolidation of holdings so as to bring about better agricultural yield. Hence the aforesaid decision would not enable us to hold that the provisions of section 7(1) of the Act are ultra vires the Constitution.
11. In the case of Sant Ram v. Labh Singh (supra), it has been observed as below :-
"(4) It is hardly necessary to go into ancient law to discover the source of the law of pre-emption whether customary or the result of contract of statute. In so far as statute is Bhau Ram's case decides that a law of pre-emption based on
vicinage is void. The reasons given by this Court to hold statute law void apply equally to a custom. The only question thus is whether custom as such is affected by part III dealing with fundamental rights and particularly Article 19(1)(f)............. The definition of the phrase `laws in force' is an inclusive definition and is intended to include laws passed or made by a legislature or other competent authority before the commencement of the Constitution irrespective of the fact that the law or any part thereof was not in operation in particular areas or at all. In other words, laws, which were not in operation, though on the statute book, were included in the phrase `law in force'. But the second definition does not in any way restrict the ambit of the word `law' in the first clause as extended by the definition of that word. It merely seeks to amplify it by including something which, but for the second definition, would not be included by the first definition. There are two compelling reasons why custom and usage having in the territory of India the force of the law must be held to be contemplated by the expression `all laws in force'. Firstly, to hold otherwise, would restrict the operation of the first clause in such wise that none of the things mentioned in the first definition would be affected by the fundamental rights. Secondly, it is to be seen that the second clause speaks of `laws' made by the State and Custom or usage is not made by the State. If the first definition governs only Clause (2) then the words `Customs or usage' would apply neither to Clause (1) nor to Clause (2) and this could hardly have been intended. It is obvious that both the definitions control the meaning of the first clause of the Article."
12. In our view, the provisions of section 7(1) of the Act cannot be held as ultra vires, even if the provisions of Article 19(1)(f) of the Constitution had continued to be in the Constitution. The said provisions has since been deleted by the forty fourth amendment to the Constitution, which has been brought about with effect from 20-6-1979. By the very same amendment, Article 31 of the Constitution has also been deleted and the same has been replaced by Article 300-A. Article 300-A of the Constitution now provides that no person shall be deprived of his property save by authority of law. Hence as long as there is a valid law governing the rights to property, the same can no longer be challenged on the ground of infringement of fundamental rights to property as Article 19(1)(f) and Article 31 of the Constitution, which conferred the rights, have since been deleted. Thus we find that the provisions of section 7(1) of the Act are intra vires even in the face of Article 19(1)(f) and Article 31 of the Constitution. They are more so after the deletion of the aforesaid Article 19(1)(f) and 31. Once the provision is found to be just and proper even in the face of Article 19(1)(f) and 31, the same cannot be impugned on the ground of Articles 14 and 21 of the Constitution. This is a provision relating to agricultural lands. It seeks to consolidate fragments into standard holdings. Object is to improve agricultural yield. Hence the provision cannot be held to be ultra vires.
13. In the circumstances, we find that the transfer of the fragment by respondent No. 1 in favour of the petitioner, who is not an adjoining holder, or a contiguous survey number holder or is not an owner of recognised sub-division of a survey number, is hit by the provisions of section 7(1) of the Act. Hence the sale in his favour is void.
14. Shri Rajure, the learned Advocate appearing on behalf of the petitioner, has made a frantic affort to salvage the position in which he has found himself. He has taken resort to the provisions of section 31 of the Act to save the invalidity of the transaction which section 7 has brought about. He has sought to contend that though the land sold may be a fragment, the same has been allotted an independent Gat number and the entire Gat number has been transferred under the impugned transaction without there being any further sub-division made. Section 31 of the Act deals with the restriction on alienation and sub-division of consolidated holdings. These relates to holdings which are allotted after consolidation of holdings are brought about. The same relate to agricultural lands in general, whereas section 7 of the Act deals specifically with transfer of fragments. The exception which is carved out by sub-section (3)(iii) of section 31 of the Act relates to transfer in respect of a holding contemplated under sub-section (1) of section 31 of the Act, i.e., holding after consolidation; whereas section 7 of the Act speaks of transfer of any fragment. Hence the specific bar which is contained in respect of transfer of fragment in section 7(1) will not be saved by the provisions of section 31(iii) of the Act. In the circumstances, the submissions advanced by Shri Rajure deserve to be rejected.
15. In the result, we find that the order passed by the Additional Commissioner, Pune Division, Pune, allowing the revision application of respondent No. 1 and setting aside the sale-deed in favour of the petitioner deserves to be upheld. In the result, we find that the petition is devoid of merit. The same is dismissed. Rule is discharged. There will, however, be no order as to costs.
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