In The High Court of Gujarat at Ahmedabad: For Approval and Signature

LPA/932/2000 1/25 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL No. 932 of 2000

In
SPECIAL CIVIL APPLICATION No. 1491 of 1999
For Approval and Signature:
HONOURABLE MR.JUSTICE D.H.WAGHELA Sd/
HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Sd/
=========================================================
Whether Reporters of Local Papers may be allowed
1 to see the judgment ?
2 To be referred to the Reporter or not ?
Whether their Lordships wish to see the fair copy

3 of the judgment ?
Whether this case involves a substantial question

of law as to the interpretation of the
4 constitution of India, 1950 or any order made
thereunder ?
Whether it is to be circulated to the civil judge

5? 1 & 2 : YES; 3 to 5 NO
=========================================================
STATE OF GUJARAT & 2 - Appellant(s)
Versus
PRATHMESH FARMS PVT. LTD. & 1 - Respondent(s)
=========================================================
Appearance :
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.
=========================================================
CORAM : HONOURABLE MR.JUSTICE D.H.WAGHELA
and
HONOURABLE MR.JUSTICE BANKIM.N.MEHTA
Date : 31/08/2010
HC-NIC Page 1 of 25 Created On Mon Jun 20 19:29:49 IST 2016

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, 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 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 sub-section (1).
Sec. 84C. Disposal of land, transfer or acquisition of

which is invalid.
(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) 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 ownerin 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 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 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 :
(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 non-agriculturists (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]
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.
Sd/-
( D.H.Waghela, J.)
Sd/-
(Bankim N.Mehta, J.)
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.
Sd/-
( D.H.Waghela, J.)
Sd/-
( Bankim N.Mehta, J.)
(KMG Thilake)

In The High Court of Gujarat at Ahmedabad: For Approval and Signature

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In The High Court of Gujarat at Ahmedabad: For Approval and Signature

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LPA/932/2000 1/25 JUDGMENT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

LETTERS PATENT APPEAL No. 932 of 2000

For Approval and Signature:

HONOURABLE MR.JUSTICE D.H.WAGHELA Sd/­

HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Sd/­

2 To be referred to the Reporter or not ?

Whether their Lordships wish to see the fair copy

Whether this case involves a substantial question

Whether it is to be circulated to the civil judge

HONOURABLE MR.JUSTICE BANKIM.N.MEHTA

HC-NIC Page 1 of 25 Created On Mon Jun 20 19:29:49 IST 2016

1. The appellants, State authorities, have preferred this

2. Respondent No.1 herein, a private limited company

HC-NIC Page 2 of 25 Created On Mon Jun 20 19:29:49 IST 2016

3. Learned single Judge has, in the impugned

“1. Whether the circular dated 23.11.1998 issued by the

2. Whether the circular dated 23.11.1998 can be applied

Dwelling upon the definition of “person” as given in

“The Bombay Tenancy & Agricultural Lands Act,

An Act to amend the law relating to tenancies of

HC-NIC Page 3 of 25 Created On Mon Jun 20 19:29:49 IST 2016

WHEREAS it is necessary to amend the law which

AND WHEREAS on account of the neglect of a landholder

(1) “agriculture” includes horticulture, the raising of crops,

Provided that in the case of such tracts of land

(1A) “agricultural labourer” means a person whose

(2) “agriculturist” means a person who cultivates land

HC-NIC Page 4 of 25 Created On Mon Jun 20 19:29:49 IST 2016

(5) “to cultivate” with its grammatical variations and

(6) “to cultivate personally” means to cultivate land on

(i) by one's own labour, or

(6C) “to hold land” as an owner or tenant shall, for the

(7A) “joint family” means an undivided Hindu Family, and in

(8) “land” means

(i) the sites of dwelling houses occupied by

(ii) the sites or structures used by agriculturists

(11) “person” includes a joint family.

HC-NIC Page 5 of 25 Created On Mon Jun 20 19:29:49 IST 2016

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

(b) no mortgage of any land or interest therein, in

(c) no agreement made by an instrument in writing for

shall be valid in favour of a person who is not an

Provided that the Collector or an officer authorised by

Provided further that no such permission shall be

(2) Nothing in this section shall be deemed to prohibit the

(3) Nothing in this section shall apply or be deemed to have

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(4) Nothing in section 63A shall apply to any sale made

Sec. 84C. Disposal of land, transfer or acquisition of

(1) Where in respect of the transfer or acquisition of any

(2) If after holding such inquiry, the Mamlatdar comes to a

Provided that where the transfer of land was made by

(i) if the amount received by the landlord as the price

(ii) if the amount received by the landlord as the price

HC-NIC Page 7 of 25 Created On Mon Jun 20 19:29:49 IST 2016

the reasonable price within such period as may be

“The Bombay Tenancy and Agricultural Lands Rules,

Sec.36. Conditions on which permission for sale etc. of

(1) The Collector or officer authorised under the proviso to

(a) such a person bona fide requires the land for a

HONOURABLE MR.JUSTICE D.H.WAGHELA Sd/

HONOURABLE MR.JUSTICE BANKIM.N.MEHTA Sd/