MOTIPUR ZAMIDARI CO. LTD v. THE STATE OF BIHAR AND ANOIHER

Citation: [1953] 1 S.C.R. 720; 1953 INSC 39

Court: Supreme Court of India

Bench: M. PATANJALI SASTRI , BIJAN KUMAR MUKHERJEA, SUDHI RANJAN DAS, GHULAM HASAN, NATWARLAL HARILAL BHAGWATI

Judgment date: 1953-04-17

Case summary

1953 INSC 39. Supreme Court of India judgment dated 1953-04-17. MOTIPUR ZAMIDARI CO. LTD v. THE STATE OF BIHAR AND ANOIHER. Read the judgment and case...

Judgment text

8. 0. R. SUPREME COURT REPORTS 721 720 SUPREME cotrR~ REPOR'l'S [19531 195. 1 JIIO'I'fPUR ZAMINDARI CO. LTD. v. THE STATE OF BIHAR AND ANO'I'HER. RAJA JA:N"JUNATH ROY AND NARENDRA NATH ROY AND CO. TJTD. v. 'I'HE STA'I'E OF BIHAR AND ANOTHER. [PATANJALI SASTRI C. J. , MuKHERJEA, S. R. DAs. GHULAM HASAN and BHAGWATI JJ. ] Bihcir Laud Reforms Act, 1950, ss. 2 (o) aiid (r), 3-Applicabil· ity of Act to cmnpanies-'iPerson'', "proprietor'', ''tenure-holder", meaniuys of. . 1 The. word" person" in the definitions of ' proprietor" and "tenure-holder" contained in s. 2 (o) and s. 2 (r) respectively of the Bihar Land Reforms Act, 1950, includes companies incorporated under the Indian Companies Act, 1913. There is nothing repugnant in the subject or context of the Act to prevent the inclusion of a company within the terms " proprietor" and 0 • tenure-holder". On the contrary such inclusion is necessary in order to give full effect to the object of the Act. Pharmaceutical Society v.

The London and Provincial Suppl11 Association, Limited (1880) 5 App. Oas. 857 distinguished. CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 6'2 and 63 of 1953. Appeals under Article 13'2 (1) of the Constitution of India from the Judgment aud Order dated '22nd December, 195'2, of the High Court of Judicature at Patna (Ramaswami and Sarjoo Prosad JJ. ) in Miscellaneous Judicial Cases Nos. '238 and '24'2 of 1952. P. R. Das (J. C. Sinha and L. K. Chaudhry, with him) for the appellant in both the appeals. M. 0. Setalvad, Attorney-General for India (L. N. Sinha and Bajrang Sahai, with him) for the respondents in both the appeals. 1953. April 17. The Judgment of the Court was delivered by S. R. DAS J. ' DAS J. -Tbis judgment disposes of Civil Appeals No. 62 of 1953 and No. 63 of 1953 which have been heard together. The Motipur Zamindari Company Ltd. , the appellant in Civil Appeal No.

62 of 1953, was incorporated The in 1932 under the Indiau Companies Act and has its registered office in Bengal. It supplies sugar-cane to and A a sister concern named Motipur Sugar Factory Ltd. Raja J ankinath Roy and N arendra Nath Roy and Co. , Ltd. , the appellant in C. A. No. 63 of 1953, was · incorpor:i. ted in 1933 under the Indian Companies Act and also has its registered office in Bengal. This company owns Zamindari properties in Purnea in the State of Bihar as well as in Maida in the State of West Bengal. It carries on business, amongst others, as banker and financier. On the ·30th December, 1949, a bill entitled the Bihar Land Reforms Bill was passed by the Bihar r~egislature and having been reserved for the consideration of the President received bis assent on the 11th September, 1950.

'l'be Act so passed and assented to was published in the Bibar Gazette on the 25th September, 1950, and was brought into force on the same day by a notification made by the State Government in exercise of powers conferred on it by section 1(3) of the Act. Many of the proprietors and tenure-holders of Zamindari estates took proceedings against the State of Bihar for appropriate orders restraining the State Government from taking over the estates under the provisions of the Act which they claimed to be beyond the legislatiye competency of the Bihar Legislature and otherwise void. On the 12th March, 1951, a Special Bench of the Patna High Court held that the Act was unconstitutional on account of its contravention of article 14 of the Constitution. The State of Bihar appealed to this Court. Pending that appeal, the provisional Parliament passed the Constitution (First Amendment) Act, 1951. The respondents in the main appeal took proceedings in this .

Court, contending that the Act amending the Constitution w11s invalid. This • Court, however, on 5th October, 1951, upheld the validity of the amending Act. On 6th November, 1951, notifications were issued under section 3 of the Bihar Act declaring that certain Touzies belonging to the appellants specified in the of notification had passed to and become vested in the State. Both the appellants made separate applications Another. to the Patna High Court under article 226 of the Constitution praying for mandamus or suitable direc· tion or' order restraining the respondent from taking possession of their respective estates or tenures by virtue of the said notifioations and for other ancillary reliefs.

The appeals filed by the State of Bi bar against the order of the Special Bench declaring the Act to be void came up for hearing before this Court and this Court upheld the validity of the Act, except as to a few provisions mentioned in the majority judg· ment which were held to be severable. Thereafter, the two applications made by the two appellants under article 226 before the Patna High Court came up for bearing and were dismissed by a Bench of that Court on the 22nd December, 1952. The present appeals have been filed with leave of the Patna High Court against the said dismissal. The question raised before the High Court was whether the Act was, on its true construction, intended to apply to Zamindari estates of companies incorpor· ated under the Indian Companies Act.

In support of the appellants' contention that it was not, it was urged- that the Bibar Legislature bad no authority to legislate with respect to trading corporations or non-trading corporations· whose objects were not confined to one State. Reference was made to entries 43, 4411. nd 45 of List I to show that it was Parliament alone which was authorized to make law with respect to matters set forth in those entries. 'rbe contention was that the Bibar Legislature in enacting the Act invaded the Union field and so the Act was invalid. 1 '. 1 bis argument was sought to be reinforced by reference to the provisions of t,)ie Act and the winding up provisions of the Companies Act. The Patna. High Court overruled this contention and Mr. P. R. Das appearing in support of these appeals has not challenged this part of the decision of the Patna High Court. · The main point urged by Mr. P. R.

Das is that even if the Bihar Legislature could make a law for acquir-ing Zamindari estates of incorporated companies it did not, by the Act, in fact do so. Section 3 autho-rises the State Government to declare by notification that the estates or tenures of a proprietor or tenure-holder have passed to and become vested in the State. It will be recalled that it was under this section that the State Government on the 6th November, 1951, issued thenotificationswith respect to the estates of the appellants situate within the State. Mr. P. R. Das's principal contention is that the appellant companies do not come within the terms "proprietor" or "tenure- holder" as defined by the Act and consequently no part of their estates were intended to be vested or did in fact vest in the State.

"Proprietor" -is defined by section 2(o) as meaning a person holding in trust or owning for his own benefit an estate or a part of an estate and includes the heirs and successors-in-interest of a proprietor and, where a proprietor is a minor or of unsound mind or an idiot, his guardian, committee or other legal curator. Tenure-holder is defined by section 2 (r} as meaning a person who has acquired from a proprietor or from any tenure-holder a right to hold land etc. The argument is that the word "person" in the two definit'1ons referred to above does not, in the context of the Act, include a company. It is conceded that under section 4(40) of the B1har General Clauses Act the word "person" would ordinarily iuclude a company, but it is urged by Mr. P. R. Das that the definitions given in that section apply only where there is nothing repugnant in the subject or context.

His contention is that the definition of "proprietor" and "tenure-holder" indicates that a company which owns Zamin-daries is not covered by that definition. We are unable to accept this contention. It is not disputed 9t that a company can own an estate or a part of an estate and, indeed, the appellant companies are fight-ing these appeals only to protect the estates they own. Therefore, they CO! lle within the first part of the definition. The definition after stating what the word means proceeds to state what else the definition would include under certain specified circum-stances, namely, the heirs and successor-in-interest etc. The word "heir" certainly is inappropriate with regard to a company, but there is nothing inappropriate in the comp:rny having a successor in-interest. It is pointed out that there is no provision in the definition of proprietor to include the directors, managing agents and, in case of winding up, the liquidator of the company.

This circumstance does not appear to us to be a cogent reason for holdfog that the word "proprietor" as defined does not cover a company. It is to be noted that the agent or, in case of insolvency, the official assignee or receiver of an individual proprietor are alw not included in the definition. Reference to proprietor who is a minor or of unsound mind or an idiot and his guardian etc. , was obviously necessary because those proprietors suffer from legal disabilities. M~. P. H. Das refers us to various sections and rules framed under section 43 of the Act to show that only natural persons were intended to be affected by the Act, because, he urges, the company is not competent to do the acts therem referred to. It is not disputed by Mr. P. R. Das that there is no difficulty on the part of an incorporated company to do all these acts by its directors or managing agents or other officers empowered in that behalf by its articles of association, but his contention is that tbe provi.

'>ions of the Indian Companies Act should not be imported into the consideration of the provisions of hiK Act. He relies prim~rily on the case of PharnMl'eutical Society v. The London and Provincial Snpply Association, Limited(') where it was held that a corporation ('! (1880) L. R. 5 App. Cas. 857. 8. C. R. SUPREME COURT REPOitTS 72S did not come within the word "person" used in th~ Pharmacy Act, 1868 (31 & 32 Vic. , Chapter 121). Reliance was placed upon the observations of Lord Selborne L. C. at page 863. 'The preamble to that Act recited, amongst other things, that it was "expe- Th• dient for the safety of the public &bat persons keeping open shop for the retailing, dispensing or compound-a. nd ing of poisons, and persons known as chemists and druggists should possess a competent practical knowledge of their business. " This clearly comtemplated • persons skilled in matters pharmaceutical and not impersonal corporate bodies which would know nothing about that particular business.

Indeed, Ijord Blackburn in bis speech in the House of Lords in the Pharmaceutical Society's case(') referred to this preamble and observed at page 870 :- "Stopping there, it is quite plain that those who used that language were not thinking of corporations. A corporation may in one sense, for all substantial purposes of protecting the public, possess a competent knowledge of its business, if it employs competent directors, managers, and so forth. But it cannot possibly have a competent knowledge in itself. The metaphysical entity, the legal 'person', the corporation, cannot possibly have a competent knowledge. Nor, I think, Qan a corporation be supposed to be a 'person known as a chemist and druggist'. " His Lordship then referred to the provisions of sections 1 and 15 of that Act and came to the conclu-sion that the word "person" in that Act . meant a natural person.

'The effect of that case is that whether the word "person'' in a sLatute can be treated as including a corporation must depend on a consideration of the object of the statute and of the enact-ments passed with a vie\v to carry that object into effect. In view of the object of that Act as recited in the preamble there could be no manner of doubt that the word "person" in that Act could not possibly include a corporation. Lord Selborne towards the end of page 863 indicated, by reference to the 18th • (11 (1880) L. R. 5 App. Cas. s,57· stiction, that the Legislature hy the word "person" referred only to individual persons as it was clearly repugnant to the subject of tha~ Act to include a corporation within the word "per. . ts. (1) [1952] S. C. R. 889 at p. 941. Appeals dismissed. Agent for the appellants: R. R. Biswas. Agent for the respondents: G. H. Rajadhyaksha,

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