STATE OF MYSORE ETC. v. M. L. NAGADE AND GADAG & ORS

Citation: [1983] 3 S.C.R. 93

Court: Supreme Court of India

Bench: D.A. DESAI, O. CHINNAPPA REDDY

Case summary

The sole contention which found favour with the High C~urt was that the Rule under challenge confers unguided and uncontrolled power and there is no guideline either in the Act or the Rules and · there is excessive delegation of legislative functions and thet•! This· Court...

Judgment text

STATE OF MYSORE ETC. v. M. L. NAGADE AND GADAG & ORS. May 6, 1983 [D. A. DESAI AND 0. CHINNAPPA REDDY JJ. j Hyderabad Land Revenue Rules subsequently repealed and re-enacted as. Andhra Pradesh (Te/engana 11. rea) Land Revenue,. Rules, 1951 framed under Hyderabad Land Revenue Act (V/11of1317 F)~r. 71 as amended on July 4, 1958 -Diversion ofagricultural land to non-agricultural purposes-mode ofassessment of/and revenue-Whether rule valid. ' Bombay Land Revenue Rules framed under Bombay Land Revenue Act, 1879-r. 81 as amended on March 27, 1958-Whethe_r rule valid. , Rule 71 of the Hyderabad Land·Revenue RuleS', Which is si:tbilat tO·r. 81 of the BombaY'Land Revenue Rules, provides for mode of assessment of land · revenue in the event o~ diversion of agricultural lands to non-agticultural purposes.

The respondents in these appeals had filed certain writ petitions challe~g ing the levy and demand of non-agricultural assessment made by the appellants, on the ground, among others, that the -. above rules. conferred unguided and . uncontrolled power and there was excessive delegation of legislative functions and"therefore·the rules were violative of Art. 14 of the Constitution. The l·! igh Court accepted ihe contention and quas11ed the demand of assessment. . Allowing the appeals, HELD : Delegation of some part of legislative power becomes a compulsive necessity for viability and functioning. of the vatious institutions ereated· by the Constitution. The legislature cart delegate details to 6e' wotked out tsy the delegate and the details may be numerous and significant yet they tJlay wen be made over to the appropriat~ agency. The guideline ne·ed nOf be found iri the impugned provisiort.

The same may be co1lected:from the setting iti which· the provision is pl , and it cannot be said that the Commissioner enjoys wide ai:bitrary discretionary power. The discre- / tion has to operate within the floor and the ceiling; the yardstick is the value of the land used for non-agricultural purpos~s in the locality, the area has to be divided village-wise, town-wise, city-wise and overall what is being assessed is none-the-less land r"evenue. The High Court was in error in striking down the provision on the ground that the Commissioner enjoyed wide arbitrary discretion uncontrolled by any guidelines. The discretion is not only controlled but · there is sufficient guidelines in the Act and the Rules. [106 H, 107 A-G] . .

We would expect revenue authority ordinarily to hear the person affected by the order levying non-agricultural assessment or at the time of its appeal or revision, but on this count the demand eannot be struck down because when a demand is served it can be objected to and the decision is appealable. It cannot . be said that the Rule would be bad as it does not inhere the principles of natural justice. [107 G-H, 108. A] CIVIL A~1'. ELLATE JuRISDICTION : Civil Appeals Nos. 1221-1222 & 1407-1413 of 1970 From the Judgment and Order dated the -30th September, 1965 of the Mysore High Court in Writ Petitions No. 1934/64, 672 of ··--i; 1963, 1165-1168, 1198-1199 & 2619of1963 respectively. M. Veerappa and Ashok Kumar Sharma for the appellants in all appeals.. Naunit Lal. Kai/ash Vasdev and Krishna Kumar for Respondents in CA. Nos. 1407-1412/73. M. N. Phadke, Vinod Bobde, D. N. Misra arid Mrs. A. K. Verma with him for the Respondents in CA. f222 & 1413/70. S. S. Java/i and B. P.

Singh for the Respondent in CA. 1221 of· 1970. The Judgment of the Court was delivered by DESAI, J. " Civil Appeals Nos. 1221-1222/70 arise from decision of the Division Bel\ch of the then Bish Court of Mysore at ' 96 SUI'JtilME COURt REPORtS [1983] 3 s. c. R. Bangalore in Writ Petition Nos. 672/63 and 193/64 by which the High Court quashed the demand of Non-Agricultural assessement (N. A. assessment for short) made by the respondents on the ground that Rule 71 as amended on July 4, 1958 of. the Hyderabad Land Revenue Rules which appeared to have been repealed and re-enacted as the Andhra Pradesh (Telengana Area) Land Revenue Rules, 1951 was unconstitutional being violative of Ait. 14 of the Constitution and hence void. Civil Appeals Nos.

1407 to 1413/70 arise frorri a decision of the Division Bench of the same High Court in a group of writ petitions c- by which the High Court quashed the demand of Non-Agricultural assessment on the ground that Rule 81 of the Bombay Land Revenue Rules as amended ori March 27, 1958 was unconstitutional being violative of Art. 14 and hence void. I) Appellants in both the groups are the State of Myso're and some officers. Respondents are the original petitioners in both the groups. ·Rule 71 of the Hyderabad Land Revenue Rules and Rule 81 of the Bombay Land Revenue Rules were amended in an identical manner but on two different dates and the validity of . each amended rule was questioned on identical grounds and more or less the High Court for identical reasons quashed both the Rules as amended and almost identical grounds were convassed in support of rival contentions before us and therefore, all these appeals are disgosed of by this common jucfgment.

The boundaries of old Mysore State underwent a change consequent upon the re'6rganisation of States in 1. 956. Some portion of former Bombay State as weUas. some portion of the old Hyderabad State were allocated to Mysore State. This historical phenomenon led to different Land Revenue Code remaining in-operation in· different parts of the State of Mysore. To be precise that area of forme. r Bombay State forming part of Mysore State continued to b" governed in respect ofland revenue by the Bombay Land Revenue Code, 1879 and the rules made thereunder. Similarly that area of former Hyderabad State which was allocated to Mysore· State continued to be governed by . the Hyderabad Land. Revenue Act (VIII of 13l7F). MYSORE v. N. L. NAGADE (Desai, J. ) 91 In Re C. A. Nds. 1221-1222/70 : Respondents questioned the v·alidity of the amended Rule 71 of the Hyderabad Land Revenue Rules which came into force from July 4, 1958.

It reads as under : "71 (I) : Mode ofassessment in the event ofdiversion of agricultural lands to non-a-gricultural purposes, the special assessment shall be levied as follows :- ! a) in the case of. land situated in any village the population of which does not exceed. 5,000 the rate of special asse. ssment Jeviab! e shall be not less than the agricultural assessment leviable on such land and note more Rs. 40 per acre. (b) in. the case of land situated in any village or town other. then a town coming under Sub-Rule (c) of this. Rule, the population of which exceeds 5,000 the rate . of special assessment leviable shall be not less than Rs. 40 per acre and not more. than Rs. 80 per acre. · (c) 'in the case of land situated within an area compiis- . ing the Municipality limits of the town of Raichur, Gulbarga and Bidar the rafo of special assessment leviable shall be not less than Rs. ·J50 per acre and not more than Rs. 250 per acre.

" The validity of the amended rule was challenged on the ground that it provides no gu. idelines for determining N. A. assessment for v. arious plots and that it suffers from the vice of excessive delegatio~ of essential legislative functions and therefore any demand raised m exercise of the power conferred by the amended Rule 71 would be arbitrary and therefore violative of Art. 14 of the Constitution. · In Re. C. A. Nos, 1407 to 1413/'70 : Respondents who were petitioners in the. High Court questioned the validity of Rule. 81 of the Bombay Land Revenue Rules as amended. on March 27, 1958. It reads as under : "81 '(1): Rate of Non-Agricultural assessment: The· rate of Non-Agric1dtural assessment \eviabl~ shall be as follows :- i. l 98 SUPRBMB COURT REl'ORTS it983) 3S. C:. R.

(a) in the case of land situated in any village the population of which does not exceed 5,000 the rate of Non- Agricultural assessment leviable shall be not·less than the agricultural assessment Jeviable on such land and not more than Rs. 40 per acre. (b) in the case of land situated in any village or town . other than a town coming under Clause (c) of this rule, the population of wpich exceeds 5,000 the rate of Non-Argicultral assessment leViable shall be not foss than Rs. 40 per acre and not more than Rs. 80 per · acre. (c) in the case of land situated in any City or Town referred to in the Table to Rule 100, the rate of No11- Argicultural assessment leviable shall be not less than Rs. 150 per acre and not more than Rs. 250 p•:r acre. (d) Non-Argicultural assessment winbe levied at uniform rates'for the entire extent converted for non-agricultural purposes,, irrespective of the extent actually built upon. '' The game contention which was advanced in the former .

group of petitions was repeated in this group of petitions. Validity of both the Rules was questioned on other diverse grounds but except the one herein mentioned, other contention. s did not find favour with the High Court and therefore, they need not be recapitulated Jiere. The sole contention which found favour with the High C~urt was that the Rule under challenge confers unguided and uncontrolled power and there is no guideline either in the Act or the Rules and · there is excessive delegation of legislative functions and thet•! fore, both the amended Rules are violative of Art. 14 of the Constitution. Thus the question which falls for consideration is ·whether the amended Rule 71 of the Hyderabad Land Revenue Rules and amended Rule 81 of the Bombay Land Revenue Rules suffer from the vice of excessive delegation of legislative functions or that. it confers ncanalised and unsuided arbitrary power on the officers or there is MYSORE v. M. L. NAGADE (Des? i, J.

) 99 no guideline to govern the discretion while enforcing and implement· ing the ! WO Rules. We would first examine the validity of amended Rule 71 of the Hederabad Land Revenue Rules. The Hyderabad J,and Revenue Act (VIII of 1317F) was enacted to amend and consolidate the orders and regulations relating to land revenue. It is an exhaustive Code divided into 12 Chapters. Chapter U deals with appointment of Revenue Officers and their respective powers. Chapter IV 'contains provision in respect of land and land revenue. Sec. 24 provides that · all unalienated lands belong to Government. Sec.. 48 provides that all land, whether applied to agricultural or any other purpose and wherever i;ituate shall be liable to payment of land revenue to the Government in accordance with provisions of this Chapter and ...

Chapters VII and IX except in case title to land has been transferred to any municipality or the revenue thereof bas been wholly remitted under any special contract with the Government or under any order or law. Sec. 50 which is material for the present purpose confers power :p for assessment and levy of land revenue. It reads as under : . "50. Land revenue shall be assessed according to the various modes of use- (a) agricultural use. (b) In addition to agricultural use any other use from which profit or advantage is derived. . When rate is assessed on any land for any one of the . aforesaid purposes and the land is,'appopriat~ for any other purpose the rate thereof shall be altere Rules, 1951. Rule 71 a~ ame~ded on July 4, 1958 has been extracted hereinbefore. It provides for mode of assessment in the event of diversion of· agricultural lands to non-agricultural purposes. Briefly, N. A.

assessment also styled as special assessment has to be levied within the minimum and the max'mum as provided in sub-clauses (a), (b) and (c) of Rule 71 (I). The amended ru. le also confers power for upward revision· of N. A. assessment at intervals. -r· ' ls this power uncan(llised, unguided or arbitrary? Rule 71 (I) as amended recites that in different ar~as correlated. to population between th~ ! looi and the. ceiling therein prescribed, N. A. assessment has to be levied. Ordinarily the land is put to agricultural use and the assessment is to be levied depending upon the use of the, land ... for agricultural purp ses. Where there is a diversion in . the use of land, a special assessment called N. A. assessment can be levied. The right to levy N. A. assessment is not in dispute. And N. A. aSS fuctories on any. rational basis and the (:orporation failed to observe the law to determine the annual rental value of each building and land comprised in each of the Textile factories.

We fail to see how this decision would be of any use because there is no flat rate levy here and the N. A. assessment has to be levied in respect of each plot of land keeping in view its location, use and the profit derived by the use of the lari. d. Reference was next made to State of Andhra Pradesh & A11r. v: Nal/a Raja Reddy & Ors. (') Affirming the decision of the Andhra High . H (I) (1967) 2S. C. R. 679. (2) [1967) 3 S. C. R. 28. • MYsoRt-v. M. L. NAGADE (Desai, i. ) Court which declared Andhra Pradesh Lartd Revenue (Additional Assessmet1t) and Cess Revision Act, 1962 as unconstitutional, the Court held that the classification based on ayacuts has no reasonable relation to the duration of water suppl}' Or to the OllTS l19i\3j 3s. c. il.. ground that it confers wide arbitrary, uncanalised discretionary power \~uncontrolled by any guidelines. A very feeble attempt was made to urge that there was exceS• . sive delegation of essential legislative functions to thll executive ·giving.

it the power not only to enact the rule bat to ll! fl1md it so as to vary the N. A. assessment. Sec. 50 clearly confers power on the State Legislature to levy assessment and when the land is diverted to a use other than agriculture, the legislature ·conferred the power· to levy N. A. assessment. Elaborate provision· has been niade for levying assessment. Sec. 172 conferred power to enact rules for givi·og effect ·. to the provision of the Act and the guideline was· provided as herein above indicated. Therefore, we are not impressed by the submission that in the case the legislature was guilty of delegating its essential . 'legislative functions in favour of the executive. Re C. A. Nos. 1407 to 1413/70: In this group of appeals, vires of amended rule 81 of the Bombay Land Revenue Rules was questioned on the same identical grounds and the challenge. must fail for the same reasons. We may however, briefly point out the scheme of the relevant. Act and the rules governing this case.

Bombay Land Revenue Act was enacted in the year 18 79 to consolidate and amend law relating to revenue officers and to the assessment and recovery of land revenue and other matters connected with the Land Revenue Administration·. Sec. 48 confers power to . levy and assess the land revenue with reference to the use ofthe land -(a) for the purpose of agriculture, (b) for the purpose of building, , and (cl for a purpose other than agriculture or building. Chapter VIII includes provision for Surveys, Assessments and Settlements of Land Revenue. Chapter VIII-A makes forther provisions for assessment and settlement of land revenue on agricnlturaj land. Chapter xr. makes detailed provision for the procedure to be followed by the revenue officers while discharging their duties and carrying out the functions imposed by the Code. Chapter Xlil provides foi· appeals and. revisions against the orders of the revenue officers..

Sec~ 21'4 confers power on the State Government to make rules not inconsistent with the provisions of the Act to carry put the purpose and object thefeof and for the guidance ? fall persons in mattetf 1:onnectcd with the enforcement of the Act. Armed with this povv€fr; Land Revenue Rules, 1951 were enacted. Chapter XIV headed 'imp()sitlon MYSORE v. M. L. NAGADE (Desai, J. ) and revision of non-agricultural assessment' make detailed provisions for assessment and levy of N. A. assessment. Rule 80 confers power for alteration of assessment when land assessed or held for agricul· tural purpose if used for non-agricultural purpose. Rule 80A confers power for revision of N. A. assessment on the expiry of the period for which assessment on any land was assessed and levied. Rule 81 provides for ordinary rates of N. A. assessment.. It was amended and the validity of the amended rule is in question.

Floor and ceiling rates vary from area to area demarcated on the basis of population and it is further provided that in fixing the rates within floor and the ceiling, due regard shall be had to the general level of the value of , the lands in the locality used for non-agricultural purposes. Rule 82 makes detailed provision for the rate of non-agricultural assessment to be determined in accordance with that provision where special rate of non-agricultural assessment is in 'force. Where N. A. assessment is levied at an ordinary rate, the Commissfoner before detor· . ·mining the rate at which N. A. assessment will be levied on any parti· cular plot has by notification to divide the villages, towns and cities in each district in his division to which a standard rate under Rule 82 has not been extended into two classes. Even while assessing N. A. assessment, the Commissioner has to keep in view the level of value of land in the locality used for non-agricultural purposes.

In our opinion, both the Act and Rules thus provide for sufficient guidelines, and it cannot be said that the Commissioner enjoys wide arbitrary discretionary power. The discretion has to operate within the floor and the ceiling; the yardstick is the value of the land used for non-agricultural purposes in the . locality, the area has to be divided village-wise, town-wise, city-wise and overall what is being assessed is land revenue because N . A. assessment is none·the·less land revenue. In our opinion, the High Court was in error in striking down the provision on the ground that the Commissioner enjoyed wide arbitrary discretion uncontrolled by any guidelines. The discretion is not only controlled but there is sufficient guidelines in the Act and the Rules and therefore, the High Court was in error in striking down the demanded Rule 81. G, It was in passing urged that there is no prov1S1on for notice before N. A. assessment is levied.

We would expect revenue authority ordinarily to hear the person affected by the order levying N. A. assessment or at the time of its appeal or revision, but on this count the demand cannot be struck down because when a demand is served, it can be objec"ted ·to and the decision is appealable. It cannot 108 SUPREME COUltT REPORTS (1983) 3 S. C. R. be said that the Rule would be bad as it does not inhere the princi- 'ples of natural justice. The decisions of the . High Court were not sought to be supported on any other ground. Accordingly, these appeals must succeed. All the appeals are allowed and the judgments 'of the High Court in both the groups are quashed and set aside and the writ petitions filed by the respondents are dismissed with costs throughout. H. S. K. Appeals allowed. r