RAMAN LAL BHAI LAL v. STATE OF GUJARAT

Citation: [2008] 2 S.C.R. 468

Court: Supreme Court of India

Bench: R.V. RAVEENDRAN, LOKESHWAR SINGH PANTA

Case summary

RAMAN LAL BHAI LAL v. STATE OF GUJARAT.pdf

Judgment text

/ [2008] 2 S. C. R. 468 RAMAN LAL BHAI LAL v. STATE OF GUJARAT : (Civil Appeal No. 4420 of 2004) I FEBRUARY 5, 2008 [R. V. RAVEgNDRAN & LOKESHWAR SINGH PANTA, JJ. ] f ~. Lands Ceiling : i Gujarat Agricultural Lands Ceiling Act, 1960: ss. 6(2), 8, 20, 21, 37 -f Person - Meaning of-Agreement proposing to purchase land in joint names entered into by five couples - I Agreement also stating that purpose was not joint cultivation of land - After purchase, they entered into another agreement recording d~vision ofland into ten portions among them - Order of Deputy: collector that a group of persons purchasing agricultural land together, being an association of persons, had to be treated as 'a person' under the Act and therefore they could: jointly hold only one unit in view of provision of s.

6(1) ofthe Ceiling Act and not five units as held by Mamlatdar I - Correctness of - Held: Not correct - Mere combination of persons without any intention to carry out a joint venture would ,,not conv~rt them into a body of individuals/association of persons in the absence of a deeming provision in a statute or I an agreement - Thus, each couple together with the members of the family (excluding major sons) is a person entitled to jhold one μnit - Having regard to s. 6(2) of the Ceiling Act, the share of $ach couple (husband and wife) in the land, plus any other land individually held by them to be calculated to find out whether they held any land in excess of the ceiling limit - Directions issued - Bombay General Clauses Act, 1904 s. 3(35) --1 Bombay Tenancy and Agricultural lands Act, 1948s. 63 - Gujarat Agricultural Lands Ceiling Amendment Act, -.. j I 1972 - s. 8(1), (2), (3) and (4). Gujarat Agricultural Lands Ceiling Amendment Act, ~ ~ 1972 - s.

8(1), (2), (3) and (4) - Partition among co-owners / taking place on 30. 12. 1971 - Held: By virtue of s. 8, partition effected on 30. 12. 1971 was deemed to be made to defeat the object of Amendment Act, 1972 and consequently partition would have to be ignored while computing the surplus land. Interpretation of statutes: Use of word 'include' - Connotation of- Held: Connotes intention to enlarge meaning of word used in statufe. ~ Words and phrases: 'person', 'body of individual', 'association of persons' - Ordinary and legal meaning of The five appellants alongwith their respective spouses entered into an agreement proposing to purchase about 175 acres of land in their joint names. The reason stated in the agreement forjoint purchase was to avoid entering into separate agreements with several owners of the lands. They also agreed that there would be no collective or joint cultivation of the lands proposed --1 to be purchased by them.

They purchased 172 acres 36 guntas of agricultural land under 4 sale deeds. After the purchase of the lands, these ten purchasers (five couples) entered into another agreement recording that the total sale price of Rs. 46,300/- was paid equally by all of them and division of land into ten portions among them. On their applications, mutation entry was made showing each co-owner as the separate owner of lands. ~ In land ceiling proceedings, the Mamlatdar issued a notice under s. 20 of the Gujarat Agricultural Lands Ceiling Act, 1960, to the co-owners seeking particulars of lands held by them to determine whether they held any surplus land. After considering their statements, Mamlatdar held that the five couples were entitled to hold five units of 36 . ,. _ acres each. He made a declaration that surplus holding . ' was 1 acre, 31 guntas, which vested in the Government. Deputy Collector held that a group of persons or >'l . • association of persons,purchasing agricultural land . ' .

together, had to be treated as ' a 'person' under the Act and therefore they could jointly hold only one unit in view of provision of s. 6(1) ofthe Ceiling Act. As a consequence he determined the surplus land as 145 acres, 36. guntas. Appellants filed revision before the Revenue Tribunal. The Tribunal upheld the decision of Deputy Collector by applying the definition of 'person' in the Ceiling Act. Single Judge of High Court allowed the petition of appellants and remanded the matter to. the Revenue Tribunal to decide C; whether the definition of . 'person' in the Bombay General Clauses Act, 1904 could be imported into the definition of a·•person' under the Ceiling Act. : · · · i" • t' ''•. · ' ' • . . • ... , •. ·. . ·. : ·· The Division Bench of High Court allowed the appeal in part holding that there was no need for remand as the question whether the definition of 'person' included an .

association of persons, was a pure question of law which could be decided by the High Court itself. The order of . Tribunal. was thus restored.. Hence the present appeal. · · . Allowing the appeal, the Court·.. · · HELD: 1. 1. The word 'person' is defined in the Gujarat Agricultural Lands Ceiling Act, ·. 1960, but it is an inclusive definition; that is '_'a person includes a joint family. " Where the definition is an inclusive definition, the . use of the word 'includes' indicates an- intention to ! ilnlarge the. meaning of the word used in the Statute. Consequently, the word must be construed as comprehending not only such things which they signify according tc) their natural import, but. also those things which the interpretation clause decla. res that they shall include. Thus, where a definition uses the word 'includes', as co'ntrasted from 'means', the , - . . . \ • I , , ·- . word defined not only bears.

its ordinary popular and natural meaning, but in addition also bear the extended statutorY meaning. [Para 15] [486-C, b, E] S. K. Gupta v. K. P. Jain AIR (1979) SC 734; Dilworlh v. ~ Commissioner of Stamps - 1899 AC 99; Jobbins v. Middlesex County Council - 1949 (1) KB 142 - rel. ied on. 1. 2. The ordinary, popular and natural meaning of the word 'person' is 'a specific individual human being'. But in law the word 'person' has a slightly different. 8 connotation, and refers to any entity that is recognized by law as having the rights and duties of a human being. The word 'person', in law, unless otherwise intended, refers not only to a natural person (male or female human being), but also any legal person (that is an entity that is recognized by law as having Qr capable of having rights and duties). The General Clauses Act defines a 'person' as including a corporation or an association of persons or a body of individuals whether incorporated or not.

The said general legal definition is, however, either modified or restricted or expanded in different statutes with· o reference to the object of the enactment or the context in which it is used. [Para 16) [486·F, G; 487·A, BJ Salmond's Jurisprudence : 12th Edition Page 299 referred to. 1. 3. 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 s. 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 s. 3(35) of General Clauses Act.

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. Thus, the word 'person' in the Ceiling Act will,. unless the context otherwise requires, refer to : 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, · 8' are jointin estate. and residence. [Para 17] [487-D, E, F, G, · . H; 488-A, 8] . I , . . ' - , . , . . " . ·Hasmukhafal Dahayabhai v. State. of Gujarat • 1976 (4) sec 100 - referred to.. . ' . ·1 -----... _ . , ,. I - . 2. 1 When several persons acquire undivided shares .

(as contrasted from defined portions) in a property, either equal or unequal, they become co-owners' of the property; or where an owner of a property transfers a 'share in the property to another, the. transferee becomes a rec-owner along with the original owner. To be termed as co-owners, 0 the right of each owner should be co-ordinate with the other 'owners'. If the right of one is higher in degree than that of the other, there is no co-ownership. Whether the I shares are equal or not, each co-owner is entitled to be in possession of every part of the property, jointly with the Ii other co-owners. [Para 19] [489-F, G, H; 490-A] ' ' ' . '. ' ) ' , I Sri Ram Pasricha v. Jagannath AIR (1976) SC 2335:;.. I referred to. · · · ' , \ ,· Salmond's Jurisprudence' - referred to. . 2. 2. A mere. combination of persons or. coming together of persons without anything more, without any intention to have a joint venture or'carry on some common activity with a common understanding and.

purpose will not convert two or more persons into a body of individuals/ association of persons. An 'association . of persons/body of individuals' is one in which two or more persons join in I : • ' a common purpose and common action to achieve some . common benefit; Where there is a com bfnation of i f'~ · individual~ by volition of the parties, engaged tog7th~r in . 1:,, '? , '11 .. '/ . 1 /1 ·/ any legal entity vyhich is capable of possessing rights and duties, including any company or association of persons 1 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, L are joint in estate and residence. [Para 17] [487-D, E, F, G, I H; 488-A, B] I I Hasmukhalal Dahayabhai v. State of Gujarat - 1976 (4) 1 sec 100 - referred to. ' "" 2. 1 When ~everal persons acquire undivided shares (as contrasted from defined portions) in a prop~rty, either.

r : equal or unequial, they become co-owners of the property; \ t or where an owner of a property transfers a share in the ' property to another, the transferee becomes a .. -co-owner 1 along with the roriginal owner. To be termed as co-owners, 0 the right of e~ch owner should be co-ordinate with the other 'owners'. If the right of one is higher in degree than that of the otber, there is no co-ownership. Whether the shares are eq~al or not, each co-owner is entitled to be in ~ · possession of every part of the property, jointly with the other co-own~rs. [Para 1~] [489-F, G, H; 490-A] I Sri Ram iPasricha v. Jagannath AIR (1976) SC 2335 referred to. : I SalmonCi:l's Jurisprudence' - referred to. I 2. 2.

A mere combination of persons or coming together of persons without anything more, without any intention to ~ave a joint venture or carry on some common activity withr a common understanding and purpose will not convert ~o or more persons into a body of individuals/ association rof persons. An 'association of persons/body of individuajs' is one in which two or more persons join in a conimon purpose and common action to achieve some common ~enefit. Where there is a combination of individuals :by volition of the parties, engaged together in . some joint enterprise or venture, it is known as 'association of persons/body of individuals'. The common object will have some relevance to determine whether a group or set of persons is an association of persons or body of individuals with reference to a particular statute. [Para 20] [490-G, 491-A, B, C] Commissioner of Income Tax v. Indira Balkrishna AIR (1960) SC 1172; Mohammed Noorulla v.

Commissioner of 1 Income Tax, Madras AIR (1961) SC 1043; M. V Shanmugam v. Commissioner of Income Tax, Madras AIR (1970) SC 1707; Meera and Company v. Commissioner of Income Tax (1997) 4 sec 677 - relied on. 2. 3 Normally, where a group of persons have not become co-owners by their volition with a common purpose, they cannot be considered as a 'person'. When 0 the children of the owner of a property succeed to his property by testamentary succession or inherit by operation of law, they become co-owners, but the coownership is not by volition of parties nor do they have any common purpose. Each can act in regard to his/her share, on his/her own, without any right or obligation towards the other owners. The legal heirs though coowners, do not automatically become an 'association of persons/ body of individuals'.

When different persons buy undivided shares in a plot of land and engage a common developer to construct an apartment building, with individual ownership in regard to respective apartment and joint ownership of common areas, the co-owners of the plot of land, do not become an 'association of persons/ body of individuals', in the absence of a deeming provision in a statute or an agreement. Similarly, when two or more persons merely purchase a property, under a common sale deed, without any agreement to have a common or joint venture, they will not become an 'association of persons/body of individuals'. Mere purchase under a common deed without anything more, will not convert a co-ownership into a joint enterprise.. Thus when there are ten co-owners of a property, they are 'ten persons and not a 'body of individuals' to be treated as a 'single person'. [Para 21] [491-F, G; 492-A, 8, C] 2. 4.

It cannot be said that merely because the sale deed is in the joint names of ten persons, they purchased the land as "an association of persons" or as "body of individuals" wit~ the common intention of carrying on agricultural activities jointly or producing income, profit . or gain or carry on some common joint venture. In fact before purchasing the lands, the ten persons had entered into an agreement placing on record that the object of purchasing the lands jointly was only to facilitate negotiations and avoid duplicating the purchase procedures and not to cultivate them jointly. There is no evidence of . any joint cultivation, nor any evidence of any intention to have a joint venture. On the ottier hand, after purchase, they divided the lands and informed the land revenue authorities and, each co-owner was registered as the owner of the respective land allotted to him/her.

This is not a case where a body of individuals purchased the land with the intention of having a continued community of interest by way. of a joint venture or as a business venture. It is therefore not possible to treat the ten purchasers as an 'association of persons/body of individuals' nor is it permissible to treat them as a single 'person', thereby restricting their entitlement to hold land to only one unit, even though there are ten purchasers. [Para 23] [493-8, C, D, E, F] 3. 1. 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-owner~ as an 'association of persons', or in holding that the ten coowners will be entitled to own only one unit. Having regard RAMAN LAL BHAI LAL v. STATE OF -· agreement to have a common or joint venture, they will not become an 'association of persons/body of individuals'.

Mere purchase under a common deed without anything more, will not convert a co-ownership into a joint enterprise. Thus when there ( are ten co-owners of a property, they are ten persons and not a 'body of individuals' to be treated as a 'single person'. But if the co-owners proceed further and enter into an arrangement or agreement to have a joint enterprise or venture to produce a common result for their benefit, then the co-owners may answer the definition of a 'person'. Question (iii) - Whether the ten purchasers constitute a 'person'? 22·. We will now examine whether a group of individuals ....

purchasing agricultural land jointly as co-owners, not with the intention of retaining the property in co-ownership and carrying on agricultural activities jointly, nor with the intention of managing it as a joint venture nor with the intention of holding it together to ~ generate income, profit or gain, but solely with the intention of dividing the land so purchased and hold their respective shares separately and individually, can be considered as a 'person' for the purposes of the Ceiling Act. The Tribunal and the High court have proceeded on the basis that the ten purchasers constituted an 'association of persons' and therefore a separate juristic ""'(' person. Let us examine whether the said conclusion is correct. 23. Instead of buying the land (172 acres, 36 guntas) jointly under the four sale deeds it was open to the ten persons to [RV. RAVEENDRAN, J. ] have bought the lands individually, that is each of them purchasing such extent of land as he or she wanted.

If they had registered the sale deeds individually (subject to each of them being entitled to buy agricultural land, under the land reforms laws In force) each couple would have been entitled to hold land to the extent of one unit. Instead of each individual or couple purchasing the land in their respective names, if for convenience in negotiations, ten individuals buy the land jointly, the position will be no different. It cannot be said that merely because the sale deed is in the joint names of ten persons, they purchased the land as "an association of persons" or as "body of individuals" with the common intention of carrying on agricultural activities jointly or producing income, profit or gain or carry on some common joint venture. In fact before purchasing the lands, the ten persons had entered into an agreement placing on record that the object of purchasing the lands jointly was only to facilitate .

0 negotiations and avoid duplicating the purchase procedures and not to cultivate them jointly. There is no evidence of any joint cultivation, nor any evidence of any intention to have a joint venture. On the other hand, after purchase, they divided the lands and informed the land revenue authorities and each co-owner was registered as the owner of the respective land allotted to him/her. This is not a case where a body of individuals purchased the land with the intention of having a continued community of interest by way of a joint venture or as a business venture. It is therefore not possible to treat the ten purchasers as an 'association of persons/body of individuals' nor is it permissible to treat them as a single 'person', thereby restricting their entitlement to hold land to only one unit, even though there are ten purchasers. 24.

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. Having regard to section 6(2) of the Act, the share of each couple (husband and wife) in the land, plus any other land -""( individually held by them will have to calculated to find out whether they held any land in excess ofthe ceiling limit. Therefore the share of each appellant in the lands jointly purchased, with the addition of the lands held by his spouse, and addition of any other land held by them, will give the basis for determining the surplus land. For example, if a husband's share as co-owner is 20 acres and wife's share as co-owner is 20 acres, and their other individual holding is another 10 acres (all of the same -!! '. ' . )....

category in C class), the total holding of the family will be 50 \ acres (20+20+10 acres) and the surplus will be 14 acres. Question (iv) - What is the effect of section 8 of Ceiling I Act? I I ~ 25. The fact that the partition among the co-owners on 30. 12 . 1971 was between 24. 1. 1971 and the date on which the Gujarat Agricultural Land Ceiling Amendment Act, 1972 came into effect, is not in dispute. Sub-section (1) of section 8 makes it clear that where any person has transferred or partitioned any land held by him between those dates then notwithstanding anything contained in any law, such partition shall be deemed to have been made in anticipation in order to defeat the object of the said Amendment Act unless it is proved to the contrary. Sub-section (2) provides how the affected person may prove the contrary by filing an application to the collector seeking a declaration to that effect.

When such an application is made, sub-section (3) requires the Collector to hold an inquiry and make an order either rejecting the application or declaring that the ,, partition was not made in anticipation in order to defeat the object of the Amending Act, 1972. Sub-section (4) lays down that where an application for declaration is rejected, the transfer or partition shall be ignored in computing the area of surplus land held by such person. The same will be the effect where no application is made at all. It is thus clear that the statutory ""f"' presumption that a partition made between those dates was intended to defeat the object of the Amendment Act cannot be displaced unless an application is made under sub-section (2) [RV. RAVEENDRAN, J. ] and a declaration is made by the Collector under sub-section (3). In this case, neither any application was made under subsection (2) nor any declaration was made under sub-section (3).

Therefore it has to be held that the partition effected on 30. 12. 1971 was deemed to have been made in order to defeat the object of the Amendment Act, 1972 and consequently, the B, partition will have to be ignored while computing the surplus land. 26. But in this case the exclusion of the partition may not have any significant effect. As we have held that the ten coowners together are not to be treated as a person, the share of the co-owner will have to be calculated and the lands individually . held by such co-owner will have to be added to determine his holding. Thereafter, the holdings of the person with that of his spouse and minor sons and unmarried daughter will have to be aggregated to determine the surplus. Question (v) - What requires to be done? 27. 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 nonagriculturists who were barred from buying agricultural land, to buy agricultural land by joining some agriculturists as copurchasers, the sale to the extent it is in favour of nonagriculturists 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. 28. We therefore, allow this appeal, set aside the orders of the High Court as also that of the authorities below.

As a consequence, we direct the Mamlatdar : (a) to decide whether any of the ten purchasers is a nonagriculturist and if so the extent of transfer in favour of such non-agriculturist which will be invalid and pass consequential orders in respect of such land in accordance with law; (b) to determine whether any of the ten purchasers who are agriculturists, holds excess land by considering their share in the lands purchased as co-owners, with other lands as provided in sections 6 to 8 of the Ceiling Act, and pass appropriate orders in accordance with law. D. G. Appeal allowed.