JUDGMENT
Untwalia, J.
1. These three writ applications have been heard together as their facts are similar and the points involved In them are identical. They are being disposed of by this common judgment.
2. After briefly stating the facts of the three cases, I shall indicate the points involved in all of them at one place. C.W.J.C. No. 1871 of 1970.
3. The petitioner is a company in corporated under the Indian Companies Act and owns a sugar factory at Majhaulia in the district of Champaran. It also owns sugar-cane farms in the district of Champaran, the area of which is about 1700 acres. The petitioner filed a return on the 30th of May, 1970, a copy of which is annexure “1” to the writ application, in accordance with Section 6 of the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act, 1961 (Bihar Act 12 of 1962) hereinafter referred to as “the Act”. The return was filed stating that it was “without prejudice”, as, according to the petitioner’s case, its farms are not subject to the provisions of the Act; they are exempt from the law of ceiling imposed by the Act In the return, the total area of the farms was given as 1689.60 acres and exemption was claimed under the various sub-clauses of Clause (b) of Sub-section (1) of Section 29 of the Act, as also under Sub-clause (i) of Clause (a) of Sub-section (2) of Section 29. The case of the petitioner is that, without following the procedure prescribed in the Act and in the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Rules, 1963 (hereinafter referred to as “the Rules”), respondent No. 3, the Officer exercising the powers of Collector under the Act at Bettiah, prepared a draft statement, dated the 30th of September. 1970, a copy of which is annexure “3” to the writ application. In this case, the petitioner Company had written letters, dated the 1st of June, 1970, to the Anchal Adhikaris concerned, a copy of which is annexure “2” to the writ application, that it had filed the return in Form LC-2 under the Act, which was to be sent to them for verification, and requested them to fix a date for the verification. The petitioner’s case is that, without paying any heed and without there being any report from the authorities concerned, respondent No. 3 prepared the draft statement arbitrarily and illegally. C.W.I.C. No. 1872 of 1970:–
4. In this case also the petitioner is a limited Company and owns a sugar factory at Narkatiaganj in the district of Champaran. In this case also the petitioner owns and operates sugar-cane farms, the total area of which is about 1200 acres. In
the return filed the area mentioned was 1183.85 acres and exemption was claimed under the various sub-clauses of Clause (b) of Sub-section (1), as also under Sub-clause (i) of Clause (a) of Sub-section (2) of Section 29 of the Act. A copy of the return filed “without prejudice” is annexure “1” in this case also. One more fact will appear in this case that the Anchal Adhikari of Mainatar (respondent No. 6) issued a notice, dated the 3rd of October, 1970, a copy of which in annexure “2” to the writ application, to the petitioner Company for the purpose of enquiry to be made by him. Without following the procedures contained in the Act and the Rules, respondent No. 3 prepared a draft statement on the 30th of September, 1970 (Annexure “3” to the Writ Application) illegally and arbitrarily.
C.W.J.C. No. 1873 of 1970:–
5. The petitioner Company in this case owns a sugar factory at Harinagar in the District of Champaran. It also owns and operates sugar-cane farms, the total area of which is about 4500 acres. In the return filed on the 25th of June, 1970 under Section 6 of the Act, a copy of which is annexure “1” to the writ application, the total area of the sugar-cane farms mentioned was 4510.77 acres. Exemption was claimed, as in the other two cases, under the various provisions of Section 29 of the Act, Without following the procedures and without issuing any notice to the petitioner Company, a draft statement was prepared by respondent No. 3 on the 30th of September, 1970, a copy of which is annexure “2” in this writ case.
6. Counter-affidavits have been filed in all the three cases. The stand taken in all of them is common. The stand is that the returns were filed by stating that they were being filed “without prejudice”, and, therefore, in the eye of law, they were no returns; no exemption was claimed in accordance with the Act and the Rules; no enquiry is necessary to be held after giving notice to the land-holder; and, in absence of complete and valid returns by the petitioners, the Collector was justified in preparing the draft statements. Objections in accordance with the Act and the Rules have been filed in all the three cases by the petitioners to the draft statements and those objections will be dealt with according to law.
7. On the facts aforesaid, the argument of Mr. Basudeva Prasad, learned counsel for the petitioners in all the three cases, is as follows:
(i) that the petitioners use the product of the sugar-cane farms, namely, sugar-cane, for consumption in their factories for production of sugar, and, therefore, the lands are exempt under Sub-clause (vii) of Clause (b) of Sub-section (1) of Section 29 of the Act;
(ii) that if it were not so, the Act win be constitutionally invalid in so far as it
affects the sugar-cane farms used and required by the sugar industry, which is an industry controlled by the Central Government; and
(iii) that the draft statements in all the cases have been prepared arbitrarily and illegally without following the procedures prescribed in the Act and the Rules.
8. Learned Advocate-General, appearing for the respondents, submitted that the lands in question are not exempt under Section 29 (1) (a) (vii) of the Act; exemption can be granted under Section 29 (2) (a) (i); and since the returns did not furnish sufficient particulars to enable the authorities to grant exemption under the said provision of law, no exemption was granted. Learned Advocate-General also drew our attention to the Bihar Ordinance No. 64 of 1972 entitled “The Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Amendment) Ordinance, 1972”, whereby certain provisions of the Act, including Sections 27 and 29, have been amended. Learned Advocate-General submitted that exemption, if at all, could be granted in accordance with the amended provisions. He could not seriously controvert the attack on the draft statements on the ground of their having been prepared in violation of the procedures prescribed in the Act and the Rules.
9. Learned counsel for the petitioners, with reference to Ordinance No. 64 of 1972, stated that the said Ordinance is constitutionally invalid. On the 8th of August, 1972, when the petitioners wanted to challenge Bihar Ordinance No. 113 of 1971, dated the 27th of December, 1971, learned Government Advocate stated that the said Ordinance was no longer in force and it was not necessary to challenge the same. The challenge was sought to be made along with the challenge to the Twenty-fourth and Twenty-fifth Constitutional Amendment Acts of 1971. A prayer was made on behalf of the petitioners to permit them to challenge Ordinance No. 64 of 1972 also on the ground on which they wanted to challenge the earlier Ordinance. In view of the nature of the order which is going to be passed in these cases, we did not think it necessary to do so. The petitioners will be at liberty to challenge the Ordinance or the Act which may follow it in another proceeding, if necessary, brought to this Court.
10. The definition of the term ‘land’ given in Clause (f) of Section 2 of the Act is as follows:–
“(f) ‘land’ means land which is used OB capable of being used for agriculture on horticulture and includes land which is an orchard, kharhar or pasturage or the homestead of a land-holder;”
The term “land-holder” defined in Section 2 (g) of the Act includes Company also. Section 5 (1) (i) of the Act says;
“It shall not be lawful for any person to hold, except as otherwise provided under this Act, land in excess of the ceiling area.”
On publication of a public notice, return has to be filed under Section 6 of the Act Section 8 (1) says,–
8. Penalty for non-submission of return in compliance with special notice–
(1) Whenever it comes to the notice of the Collector that any land-holder holds land in excess of the ceiling area or has not submitted the return within the period specified in the notice, or the extended period, under Section 6, or has submitted a return containing incorrect particulars, the Collector shall cause a notice to be served on the land-holder or his guardian, if he is a minor or person of unsound mind, directing him to submit the return with the necessary or correct particulars within sixty days of the service of such notice.”
Option has been given to the land-holder to select his ceiling area under Section 9; preparation of the draft statement is provided in Section 10 and the final publication is under Section 11, after disposing of the objections. Section 29 may be quoted in full;–
“29. Exemptions– (1) (a) The provisions of this Act shall not apply to–
(i) land in possession of the Central Government or State Government;
(ii) land in possession of local authorities or of Grampanchayats established under the Bihar Panchayat Raj Act, 1947 (Bihar Act VII of 1948);
(iii) land vested in the Bhoodan Yagna Committee established under the Bihar Bhoodan Act, 1954 (Bihar Act XXII of 1954).
(b) The provisions of Section 5 and Section 28 shall not apply to–
(i) Lac-brood farms operated by the Indian Lac Cess Committee constituted under Section 4 of the Indian Lac Cess Act, 1930 (24 of 1930);
(ii) land notified under Section 4 of the Land Acquisition Act, 1894 (I of 1894), unless the land is subsequently not acquired under the said Act;
(iii) land under the management of a Civil, Revenue or Criminal Court pending termination of litigation;
(iv) land held on the date of commencement of this Act by educational institutions, hospitals, maternity homes and orphanages, so long as they continue as such;
(v) such extent of land held by such public or charitable bodies other than religious institutions, as may be notified by the State Government in this behalf, so long as they continue as such;
(vi) tea plantations including such other area for ancillary purposes and development
thereof as may be determined by the Collector of the district in the prescribed manner, so long as they continue as such;
(vii) land required in connection with any other non-agricultural or industrial purpose, to the extent approved by Government, so long as they continue as such;
(viii) any land awarded for gallantry in the First World War or the Second World War or subsequently;
Provided that the exemption under this clause shall remain in force only for the lifetime of the person to whom the award is made.
(2). (a) The State Government may, by notification in the Official Gazette, exempt from the operation of Section 5-–
(i) sugarcane farms owned and operated on the date of commencement of this Act by sugar factories holding a licence under the Bihar Sugar Factories Control Act, 1937 (Bihar Act VII of 1937), to the extent of the land covered by such farms for a specified period and may, from time to time, in like manner, extend the period of exemption; and
(ii) So much of land not exceeding two hundred and forty acres of class III land or equivalent area of other classes owned and held under personal cultivation by any religious institution of a public nature on the date of the commencement of this Act, as may be determined by the Collector of the district in the prescribed manner to be necessary for the purposes of performing religious rites and maintenance of the religious institutions, for a specified period and may, from time to time, in the like manner, extend the period of exemption.
(b) The exemption under this sub-section shall be valid only so long as the purposes mentioned therein continue to be carried out.”
11. Rule 8 of the Rules prescribes the procedure under Section 10 (1) regarding checking of information given by or on behalf of land-holder under Sections 6, 8, 9 or information obtained by Collector under Section 7 of the Act- The three sub-rules of Rule 8 are as follows:–
“(1) The Collector receiving the original returns under Section 6 or 8 or the information under Section 9 and the Collectors receiving copies thereof under Rule 6 shall call upon the Anchal Adhikari/Circle Officer/Block Development Officer/Project Executive Officer of the area concerned, in whose jurisdiction the lands are situate, to make verification and to send to him a report after verification and he shall comply with the requisition accordingly; and thereafter the same shall be further checked, and verified by the Collector having jurisdiction over the area concerned with reference to up to date rent receipts and other relevant revenue records including the records-of-right maintained by the Collector. The Collectors, before whom copies of returns or information have been filed, shall, after such verification, transmit such reports to the Collector before whom their originals had been filed;.
(2) Wherever necessary, the Collector will examine any document which may be produced by or on behalf of the land-holder in support of his claim to the land.
(3) The Collector may himself hold a local enquiry if he considers it necessary, or get such an enquiry made by any other officer not below the rank of Sub-Deputy Collector to verify the facts stated in the return or the information received.”
12. Rule 9 deals with declaration of land exempted from the operation of Section 5, and provides:–
“(1) After the information given by or on behalf of the land-holder under Sections 6, 8 and 9 or the information obtained under Section 7 has been checked and verified In the manner prescribed in Rules 8 and 9, the Collector shall, after giving the parties a reasonable opportunity of being heard and adducing evidence, hold an enquiry regarding the land in respect of which exemptions from the operation of Section 5 have been claimed under items (i), (iv), (v), (vi), (vii) or (viii) of Clause (b) of Sub-section (i) or under item (i) or (ii) of Clause (a) of Sub-section (2) of Section 29, and thereupon–
(i) in respect of exemption claimed under items (i), (iv) or (viii) of Clause (b) of Sub-section (1) of Section 29, pass necessary order, declaring the area and description of the land exempted under one or more of the said items.;
(ii) in respect of exemptions claimed under items (v), (vi) and (vii) of Clause (b) of Sub-section (i) or item (i) or (ii) of Clause (a) of Sub-section (2) of Section 29 forward the evidence, if any, adduced before him and his enquiry report together with his recommendations in this regard to the Collector of the District who shall, after perusing the same and after giving the parties concerned a reasonable opportunity of being heard–
(a) pass necessary order declaring the area and description of the land exempted under item (vi) of Clause (b) of Sub-section (1) of Section 29;
(b) determine the area and description of the land which should be exempted under item (ii) of Clause (a) of Sub-section (2) of Section 29 and forward his recommendation in this regard to the State Government;
(c) forward his recommendation to the State Government in respect of exemption claimed under item (v) or (vii) of Clause (b) of Sub-section (i) or item (i) of Clause (a) of Sub-section (2) of Section 29.
(2) While forwarding his recommendations to the State Government, the Collector of the district shall also send the evidence, if any, adduced before the Collector and the enquiry report and the recommendation of the Collector.
(3) On receipt of the recommendations from Collector of the District and the papers mentioned in Sub-rule (2) and after considering the same, the State Government shall issue the necessary notification specifying the area and the description of the land exempted from the operation of Section 5 under item (v) or (vii) of Clause (b) of Sub-section (1) or under item (i) or (ii) of Clause (a) of Sub-section (2) of Section 29, and the period for which such exemption shall continue.”
Then, the preparation of the draft statement under Sub-section (1) of Section 10 is to be made in accordance with Rule 10. Rule 11 provides for publication of the draft statement, and then certification and authentication of the statement finally published under Section 11 of the Act is to be made under Rule 12 of the Rules.
13. In all these cases it is clear that the procedures prescribed in Rules 8 and 9 of the Rules have not been followed. The returns had been filed, and marking them “without prejudice” could not make them non est in the eye of law. Exemptions had been claimed in respect of the entire area of the lands for which returns had been filed. That being so, it was necessary to follow the procedure prescribed in Rule 9 of the Rules before preparing the draft statements under Rule 10. In the first instance, it was for the authorities to decide whether exemption could be granted under Section 29 (1) (b) (vii) of the Act, or it was a case of granting exemption under Section 29 (2) (a) (i). Since the authorities have not done so in any of the cases, the draft statements will have to be quashed and the cases will have to be sent back to the authorities concerned for proceeding in accordance with law. Because the cases have to go back, I do not propose to express any final opinion of mine on the first two points urged on behalf of the petitioners, or in regard to the validity of Ordinance No. 64 of 1972. I, however, think that, if I record the rival contentions of the parties in these cases, the authorities may get help in deciding, under Rule 9, the matter of granting the exemption.
14. Section 29 (1) (b) (vii) reads as follows:-- (b) The provisions of Section 5 and Section 28 shall not apply to-- * * * * (vii) land required in connection with any other non-agricultural or industrial purpose, to the extent approved by Government, so long as they continue as such;"
The first argument on behalf of the petitioners is that the sugar-cane produced in the sugar-cane farms belonging to the petitioners is used and utilised in manufacture of sugar, and, therefore, the land is required in connection with “industrial purpose” Within the meaning of the provision aforesaid. Even in that regard it is to be pointed out that the exemption will operate only to the extent approved by Government and so long as the land continues to be required in connection with the industrial purpose. The argument on behalf of the State is that the lands comprised in the sugar-cane farms are not required in connection with any industrial purpose; the purpose is purely agricultural and, therefore, the land is the “land” as defined in Section 2 (f) of the Act. If such a land is required in connection with industrial purpose, learned Advocate-General submitted, as for example, laying down of railway lines, tram lines, construction of quarters for workmen and officers, storage of raw materials or products, then this would be exempt to the extent approved by Government under Sub-clause (vii) of Clause (b) of Sub-section (1) of Section 29 of the Act. But, if the land remains being used for agricultural purpose, then the land is not required in connection with any industrial purpose, even though the product may be used in the manufacture of certain commodity. Section 29 (2) (a) (i), as it stood in the Act before the coming into force of Ordinance No. 64 of 1972, read as follows:–
“(2) (a) The State Government may, by notification in the Official Gazette, exempt from the operation of Section 5-–
(i) Sugar-cane farms owned and operated on the date of commencement of this Act by sugar factories holding a licence under the Bihar Sugar Factories Control Act, 1937 (Bihar Act VII of 1937), to the extent of the land covered by such farms for a specified period and may, from time to time, in like manner, extend the period of exemption;”
After the amendment, it reads ai follows:–”
(a) The State Government may, by notification in the Official Gazette, exempt from the operation of Section 5.–
(i) Sugarcane farms owned and operated on the date of commencement of the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) (Fourth Amendment) Ordinance, 1971, by sugar factories holding a licence under any law relating to sugar factories for the time being in force to such extent as may be determined in the prescribed manner to be necessary for the production of sugarcane seeds;”
15. The argument on behalf of the State is that this special provision made for sugar-cane farms, by necessary implication, excludes the operation of Sub-clause (vii) of Clause (b) of Sub-section (1) of Section 29 of the Act. On the other hand, it is contended on behalf of the petitioners, on the authority of the Supreme Court in Kannan Devan Hills Produce v. The State of Kerala, (1972) 2 SCC 218 = (AIR 1972 SC
2301), that acquiring sugar-cane farms and not exempting them under Section 29 (1) (vii) of the Act would be controlling the sugar industry, which is a controlled industry within the meaning of Entry 52 of List I of the Constitution, and, therefore, the Legislation in regard to the sugar-cane farms would be beyond the legislative competence of the Bihar Legislature. It may be mentioned here that the Act is a protected legislation included in the Ninth Schedule of the Constitution, Yet, if it is beyond the Legislative competence of the Bihar Legislature, as was argued on behalf of the petitioners, it is vulnerable. There does not seem to be much force in this aspect of the argument put forward on behalf of the petitioners. But still I do not express any final opinion in this regard either. Of course, the authorities below will not be concerned with the constitutional question. What they are required to decide is whether the sugar-cane farms owned by the petitioners are exempt from the operation of Sections 5 and 28 of the Act under Sub-clause (vii) of Clause (b) of Sub-section (1) of Section 29 of the Act If so, to what extent? Or, whether the State Government should be asked to exempt them in exercise of their powers under Section 29 (2) (a) (i)? If so, to what extent and for what period? For the purpose of indicating the extent or the period either under one provision or the other, the procedure prescribed has been given in Rule 9 of the Rules. On an erroneous view that no exemption was claimed by the petitioners, the said procedure has not been followed. The authorities are to decide, as they may be advised, to do, as to under what provision of Section 29, the exemption, if any, has to be granted to the petitioners. Thereafter, if they feel aggrieved, it will be open to the petitioners to raise these questions again in other writ applications which may be necessary to be filed. Since the authorities have not taken any view of the matter and have not followed the law prescribed in the Act and the Rules, I do not think it expedient to decide the question of exemption for the first time in these writ applications.
16. Since the cases are going back to the authorities below, one more indication may be given. If any information is received by the Collector under Section 7 of the Act, that information need not be based upon an enquiry made in presence of the land-holders. But, then, if a verification is to be made under Rule 8 after the filing of the return, it does not seem correct to say that such a verification may be made in absence of, or without any notice to, the land-holders. Whatever enquiry is to be made under Rule 8 should be made in presence of, and on notice to, the land-holders.
17. For the reasons stated above, all the three writ applications are allowed. The draft statements, copies of which are annexure “3” in C.W.J.C. Nos. 1871 and 1872 of 1970 and Annexure “2” in C.W.J.C. No. 1873 of 1970, are quashed. The cases are remitted to the authorities below with a direction that they should proceed in all the cases in accordance with law in the light of this judgment. There will be no order as to costs in any of them.
Akbar Husain, J.
18. I agree.