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TMI Blog1963 (4) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... roving and developing the villages. On September 22, 1847 the East India Company granted to Banajee the seven villages on certain terms, freed from the covenants of the cowl, and also from liability to pay assessment on land revenue in consideration of the amount spent by him for improving the villages, and an amount of Rs. 30,000/- paid by him to the East India Company. The villages were held and enjoyed by the successors of Banajee under the terms of the grant without payment of land revenue till the year. 1952. The Legislature of the Bombay State enacted the Salsette Estates (Land Revenue Exemption Abolition) Act, XLVII of 1951 (hereinafter called the Act) which received the assent of the President on January 4, 1952 and was brought into force on March 1, 1952. The Act was. enacted as a measure of agrarian reform and formed part of a pattern of legislation undertaken by the State of Bombay to abolish the rights of intermediaries between the State and the cultivator of the soil. The Act provided for abolition of exemptions from payment of land revenue enjoyed by estate-holders, in certain specified villages in the Island of Salsette, and for the vesting of waste lands in the vill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in respect of the said seven villages. The State of Bombay by its written statement contended that the appellant was not the absolute owner of the said seven villages, that the Act applied to those villages and a decree for declaration and injunction as claimed could not on that account be granted. K. K. Desai. T.: who heard the suit held that the indenture dated September 22, 1847 was not a lease, but it could be regarded as a grant of a farm of the right to recover revenue as an agent to whom the prerogative of the State was delegated as provided in the grant, and that in any event the indenture was in the nature of an agreement under which the estate was held from the Government and therefore the seven villages were an "estate" in the hands of the appellant within the meaning of s. 2(b) of the Act. The estate was also not exempted from the operation of sub-s. (1) of s. (3) of the Act. In appeal a Division Bench of the High Court held that the indenture dated September 22, 1847 created a right not of the nature of a 'lease' or 'farm' but the villages were held under an 'agreement' from the State Government within the meaning of s. 2 (d) of the Act and therefore und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant made or recognized by the terms of the cowl in respect of the estate or under a law for the time being in force in favour of any person other than the estate-holder." By sub-s. (1) of s. 3 all lands in an estate subject to the exception contained in sub-s. (3) are made liable to pay land revenue to the state : this is so notwithstanding anything contained in the cowl, a decree or order of a court or any other instrument or any law for the time being in force. Sub-section (1) is, however, subject to the provisions of sub-s. (3) to which we will separately refer. Lands rendered liable for payment of land revenue by sub-s. (1) of s. 3 are lands in an estate which means a village or part of a village specified in the schedule to the Act and held under a cowl. Every village in dispute held by the appellant is included in the schedule, but unless the village is held under a lease, a farm or an agreement from the State Government it will not be an estate for the purpose of the Act. The grant is an elaborately drawn up document. It consists of the preamble premises, reservations, habendum, covenants of the transferor and the transferee and unconditional covenant of title. In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment in the nature of land revenue but subject nevertheless to all laws and regulations which now are or from time to time may be in force in the Island of Salsette touching the sale and manufacture of spirituous liquors or poisonous or injurious drugs or substances and subject to all duties of customs and excise not being in the nature of land revenue or in 'substitution thereof or of any part thereof and subject also to the payment of an annual rent of sum of Rupee one to be paid on the first day of January in each year forever to the said East India Company their successors and assigns if demanded and subject also to such estates rights and interests as any villages tenants and occupiers had in any lands in their respective occupation on the second day of October one thousand eight hundred and thirty." The indenture then proceeds to recite that Banajee had covenanted with the East India Company that he., his heirs, successors, executors, administrators and assigns shall continue to pay the said rent reserved on the terms mentioned if demanded, continue devasthans, dharamadawas and allowance to Pals and shall not make any innovations and shall conform to the rules, ordinances an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs ; and (3) Subject to a liability to pay an annual rent of Re. I/-, if demanded. Such a grant cannot be regarded as a lease, for a lease contemplates a demise or a transfer of a right to enjoy land for a term or in perpetuity in consideration of a price paid or promised or services or other things of value to be rendered periodically or on specified occasions to the transferor. The grant does not purport to demise merely a right of enjoyment of land : it confers rights of ownership in land. There is again no contractual right reserved either expressly or by implication, to determine the grant. The reservation of the reversion and reversions remainder and remainders yearly, and rents issues and profits of all the lands hereditaments and profits in the premises clause, is of the nature of a restriction upon the estate transferred and does not restrict the quality of the estate. The rent to be demanded was again not stipulated as Consideration for the grant of the right to enjoy land, but expressly in consideration of granting freedom from liability' to pay assessment. The conclusion of the trial Court and the High Court that the villages were not held und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onging to the East India Company in consideration of payment either a fixed sum; or a share in the revenue, collected. He was made a grantee both of the lands and of the right to recover land revenue from the occupants. Such a grant cannot be regarded as in the nature of a farm. But we agree with the Trial Court and the High Court that the villages were held by Banajee under an agreement with the East India Company. By the indenture the villages were granted to Banajee, and he was freed from liability to pay assessment. The freedom from liability to pay land revenue was subject to certain covenants-covenants to respect the rights of occupants of the land and not to introduce innovations in the rates of assessment in respect of all lands in the possession of tenants, to continue Dewasthans, Dharmadawas. and allowances and to pay 'annual rent' of Re.1/- if demanded. The right to hold the villages free from liability to pay land revenue was therefore conferred by the indenture subject to the restrictions imposed by agreement between the East India Company and the grantee. Counsel for the appellant urged that the agreement contemplated by s. 2 (d) of the Act is a personal agreement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the definition, namely, specification in the Schedule and holding under a cowl as defined under the Act were therefore fulfilled, and the villages were at the date of the Act held under an agreement from the State of Bombay. The next question is whether the grant is exempt from the operation of sub-s..(1) of s. 3, under which all lands in an estate 'are and shall be liable to the payment of land revenue to the State Government'. This liability is imposed notwithstanding anything contained in the cowl, or decree or order of a court or any other instrument or any law for the time being in force. Prima facie, the covenants contained in the cowl whereby the grantee was discharged and absolved from liability to pay, land revenue must be regarded as superseded by the statutory imposition of liability to pay land revenue. But the operation of sub-s. (1) of s. 3 is subject to the provisions of sub-s. (3). That sub-section states that nothing in sub-section (1) shall be deemed to affect the right of any person to hold land in an estate wholly or partially exempt from the payment of land. revenue under a special contract, or grant made or recognized by the terms of the cowl in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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