ORDER
Shivashankar Bhat, J.
1. Petitioner challenges the validity of notification Annexure-E
whereby the Special Deputy Commissioner declared certain lands to vest
in the State Government under Section 79B of the Karnataka Land
Reforms Act. Petitioner firm was incorporated under the Indian
Companies Act in the year 1963 and has been carrying on the
manufacture of cattle feed, poultry feed and pig feed in its factory
at Pantharapalya village, Bangalore South Taluk. To expand its
activities, it purchased about six acres 19 guntas of agricultural
lands which were adjacent to its factory under a sale deed dated
17-1-1973 out of which, about 19.15 1/4 guntas are stated to have been
acquired from it by the Water Board.
2. In August 1973, petitioner applied under Section 95(2) of the
Karnataka Land Revenue Act, seeking permission to divert the user of
these lands for non-agricultural purposes. The papers seem to have
been returned and a fresh application was filed by the petitioner on
30-6-1975. By an order dated 21-1-1976 the authority concerned issued
a conversion certificate permitting the petitioner to utilise these
lands for non-agricultural purposes as per Annexure-B. It is clear
from this order that the Special Deputy Commissioner had ordered
permission as per his proceedings dated 18-11-1975.
3. On coming into force of the Urban Land (Ceiling and Regulation)
Act, 1976 (ULCR Act for short), petitioner applied to the State
Government seeking exemption under Section 20 of the said Act, which
was granted on 10-3-1977. Petitioner states that it obtained a loan of
Rs. 6.28 lakhs from Karnataka State Financial Corporation by
hypothecating the lands to the said Corporation in the year 1978. By
an additional statement, petitioner has averred that it has obtained
sanction for its proposed construction of factory buildings from the
Bangalore Development Authority for industrial purposes. State
Government has also issued utilisation certificate under the ULCR Act
based on the report of the Director of Industries. It is clear that
vast sums of money has been expended by petitioner for these
developmental activities involved in the establishment of its
factory.
4. The Karnataka Land Reforms Act 1961 (L.R. Act for short) was
drastically amended by Karnataka Act 1 of 1974 to be effective from
1-3-1974. Inter alia, in Chapter-V, Sections 79A to 79C were
introduced. For the first time, certain disabilities were created to
hold agricultural land. One such disability or ineligibility was
against a Company. By virtue of Section 79-B(1)(b)(ii), it was enacted
that it was not to be lawful for a company to hold any agricultural
land. A company holding,agricultural land as on 1-3-1974 is required,
within 90 days from the said date, to furnish to the Tahsildar certain
particulars who, after an enquiry, has to send a statement to the
Deputy Commissioner. The Deputy Commissioner as per Section 79-B(3)shall by notification declare that such land shad vest in the State
Government free from all encumbrances and take possession of the land.
Sub-section (4) provides for payment of an amount to the owner, in
lieu of the vesting of land in the State.
5. Main scheme of the L.R. Act is to vest all tenanted lands in the
State Government under Section 44, impose a ceiling on the land
holdings and compel the owner himself to cultivate the land. To
achieve these objectives, legislature has thought it fit to introduce
other provisions such as Section 79A to 79C. But such provisions are
bound to result in hardship to those who acted bona fide and purchased
lands during the transitional period, as happened in this case.
6. A disabling provision requires strict construction, so that
undue hardship could be avoided. A literal or technical construction
of the provisions of a statute leading to the deprivation of one’s
property and affecting adversely trade, industry, commerce and the
livelihood of many, has to be avoided, unless such a construction is
inevitable. Here, the action taken by the Deputy Commissioner under
the impugned order, by recourse to Section 79B of L.R. Act affects an
industrial activity of the petitioner and deprives it of its lands,
which in turn, also would result in unemployment of several
individuals.
7. By the impugned order dated 7-6-1978, purporting to act under
Section 79-B(3) of the L.R. Act, the Special Deputy Commissioner
declared that the lands in question “shall be vest” in the State
Government, since the petitioner, a company, could not hold
agricultural lands with effect from 1-3-1974.
8. A perusal of Section 79B of the L.R. Act shows that it does not
deem the land to have vested in the State Government with effect from
1 -3-1974. Vesting provided under Section 79-B(3) is the consequence
of an enquiry and declaration made by the Deputy Commissioner under
the said provision. The fact that the State is required to pay
compensation to the land owner under Section 79-B(4) shows that, the
title of the disabled person like the present petitioner-company
continues till the date of the declaration under Section 79-B(3). When
the statute says that the Deputy Commissioner shall declare that land
“shall vest” in the State Government, it can only be prospective, to
be operative on making the declaration.
9. There is no specific finding that as on 1-3-1974 lands in
question were agricultural lands, as a fact. Petitioner purchased them
on 17-1-1973. Petitioner was already carrying on industrial activities
in the locality nearby these lands. Being a non-agriculturist by
vocation, it can be assumed that the petitioner did not carry on any
agricultural operations on those lands (assuming, that, earlier such
operations were being carried on by the previous owner) and thus these
lands were, in a sense, ceased to be agricultural lands, de facto.
Thus viewed, the disability created as on 1-3-1974 by Section 79B of
the L.R. Act cannot apply to the petitioner.
10. The learned Government Advocate contended that the Deputy
Commissioner has proceeded on the assumption that the lands in
question are agricultural, because, the owner sought permission to
divert the user of these lands for non-agricultural purposes under
Section 95(2) of the Karnataka Land Revenue Act (Revenue Act for
short). Relevant part of Section 95(2) reads :-
“95 : Use of agricultural land and the procedure for
use of agricultural land for other purposes –
(1) xx xx (omitted)
(2) If any occupant of land assessed or held for the purpose of
agriculture wishes to divert such land or any part thereof to any
other purpose, he shall apply for permission to the Deputy
Commissioner who may, subject to the provisions of this Section and
the rules made under this Act, refuse permission or grant it on such
conditions he may think fit;
(Proviso omitted as unnecessary)”
11. Section 95(2) of the Revenue Act governs the case of a land,
(i) assessed for the purpose of agriculture or (ii) which is held for
purposes of agriculture. Therefore, the application seeking conversion
under Section 95(2), at the most, can lend support to the inference
that the land in question was assessed for purposes of agriculture or
held for purposes of agriculture. But it is not possible to hold that
the said land was actually an agricultural land in the sense,
agricultural operations were being carried on normally. Further,
Section 83 of the said Revenue Act also leads to the conclusion that,
the land revenue is assessed or deemed to have been assessed with
reference to the use of the land for purpose of agriculture. It also
provides that in case a non-agricultural land is diverted to be used
for agriculture, the land revenue assessed on it is to be modified
with reference to its use for purposes of agriculture. However it has
to be noted that there is no provision like Section 95(2) requiring
permission to divert a non-agricultural land into agricultural
land.
12. A reading of Sections 83 and 95(2) of the Revenue Act indicates
that levy of land revenue on a land does not necessarily lead to the
inference that it is agricultural land. A land not used for any
purpose, may still be levied with land revenue and in case such a land
is sought to be used for non-agricultural purposes, Section 95(2)operates, requiring permission.
13. A land which is agricultural may cease to be used for
agriculture for various reasons. Theoretically, such a land may be
capable of being used for agriculture and may fall within the
definition of ‘land’ defined in Section 2A(18) of the Karnataka Land
Reforms Act. But, the definitions are always subject to context and
should be read in a practical mariner.
14. In the absence of any specific finding that these lands were
being used as agricultural lands, the Special Deputy Commissioner
erred in assuming them to be agricultural lands by the sole fact that
the petitioner sought permission for using the lands for
non-agricultural purposes under Section 95(2) of the Land Revenue
Act.
15. There is another aspect of the case to be noted. The State
Government acted under Section 20 of ULCR Act by an order dated
10-3-1977 which is 15 months prior to the impugned order of the Deputy
Commissioner. Exemption under Section 20 of ULCR Act is to enable
holding of Vacant land as defined under the ULCR Act.
16. Definitions of Vacant land’ under Section 2(q) of ULCR Act and
the definition of ‘Urban land’ under Section 2(o) clearly shows that,
it is a land, other than land mainly used for agriculture. Scheme of
ULCR Act is to regulate holding of Urban lands. Its aim is not to
affect agricultural lands. When the State Government grants exemption
under Section 20 of ULCR Act, ‘the vacant land’ to which exemption is
granted can be only in respect of non-agricultural land. Exemption to
hold such a land is given to the person who has title to hold such a
land. In this case, admittedly. State Government granted exemption to
the petitioner under Section 20 of ULCR Act on 10-3-1977. Inference is
irresistable from this fact that as on 10-3-1977 :- (1) petitioner was
holding the lands and this fact was recognised by the State Government
and (2) the lands held by the petitioner in respect of which the
exemption was granted, were non-agricultural.
17. If the State Government, has, thus recognised the petitioner’s
possession of these lands and accepted the lands to be
non-agricultural, is it open to the Special Deputy Commissioner to go
behind these postulates on which the competence of State Government
rests to make the order? Special Deputy Commissioner is a subordinate
officer of the State Government, He may have an independent statutory
executive function to discharge. But, while discharging his executive
functions under any statute, he cannot ignore the facts recognised as
in existence by the State Government. Otherwise, the very basis of the
hierarchical system in which the executives are to discharge their
duties will be in jeopardy, That is why, it is observed in STATE OF
KARNATAKA v. SRI KUMARESHWAR SAHAKARI GRUHA NIRMAN ABHIVRIDDI SANGHA
LTD. & ANOTHER thus :-
“Special Deputy Commissioner is a subordinate officer
of the State Government. He has certain implied disabilities flowing
out of his subordination to the State Government. He cannot nullify
what the State Government permitted. It is not open to him to assume a
fact, contrary to the assumptions of the State
Government.”
The basic facts involved in that case are similar to the one
involved in this case, and we are told that the State Government has
not filed any appeal against the said decision.
18. There is also no dispute that already another Deputy
Commissioner had made an order under Section 95(2) of the Revenue Act
permitting conversion of land-use, in respect of these lands in
November 1975 and the petitioner had acted upon it. This is completely
ignored by the Deputy Commissioner who made the impugned order in the
year 1978.
19. Hence, we hold that, – (i) a notification under Section 79-B(3) of the Karnataka Land Reforms Act is prospective from the date of its
issuance ; (ii) while issuing an order/or notification under Section
79-B(3), the Deputy Commissioner has to take note of any order of the
State Government made under Section 20 of the ULCR Act and the basic
facts assumed for the validity of such an order of the State
Government ; and (iii) it cannot be assumed straight-away that when
permission for conversion is sought under Section 95(2) of the Revenue
Act the land in question was factually used as an agricultural
land.
20. In the result, for the aforesaid reasons, we allow this
petition and the impugned notification issued by the second respondent
in LRC.FR. 1292/77-78 dated 7-6-78 (Annexure-E) is quashed. Rule is
made absolute.
In the circumstances of the case, there will be no order as to
costs.