R.B. MEHROTRA, J.

In these Kashipur district Nainital is under bunch of petitions, the judgment of challenge. Since all the writ petitions the Commissioner, Kumaun Division, have challenged the common order Nainital, dated 14th January, 1992 passed by the Commissioner, Kumaun determining the ceiling area under Division, Nainital in ceiling appeals the U. P. Imposition of Ceiling on filed by M/s. Escorts Farms Land Holdings Act, I960 of M/s. (Ramgarh) Ltd. and its transfers all Escorts Farms (Ramgarh) Ltd. , the writ petitions can be

conveniently decided by a common judgment. The counsel for various petitioners have urged some special features in some of the writ petitions, which will be dealt with separately in this judgment.

2. For convenience, the aforesaid writ petitions can be grouped in three categories. In the 1st category comprises the main writ petition being Civil Misc. Writ Petition No. 12024 of 1992 filed by M/s. Escorts Farms (Ramgarh) Ltd. Kashipur, Nainital, which will be treated as the leading case in the present controversy, as the controversy in all the bunch of the writ petitions revolves round the points raised by M/s. Escorts Farms (Ramgarh) Ltd. , in its writ petition. In the 2nd category of the writ petitions, the transferees of M/s. Escorts Farms (Ramgarh) Ltd. have challenged the aforesaid order on the ground that they were bona fide transferees and the transactions were bone fide, as such their lands have been wrongly included in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. , the transferor of the land. In this Group II. of writ petitions, following writ petitions are categorised-

33155/1991, 885, 886, 887, 888, 891, 4123, 4124, 4125, 4126, 4127, 4128, 4129, 4130, 4166, 4167, 4168, 4169, 4170, 4171, 4172, 4173, 4174, 4175, 4176, 4177, 4178, 4179, 4180, 4181, 4182, 4183, 4184, 4185, 4186, 4289, 4290, 4291, 4292, 4293, 4294, 4295, 4296, 4297, 4298, 4299, 4300, 4301, 4302, 4303, 4304, 4305, 4306, 4307, 4309, 4310, 4311, 6277, 6278, 6279, 6280, 6282, 6283, 6284, 6285, 6286, 6287, 6288, 6289, 11734, 11735, 11736, 11737, 11738 and 11739 of 1992.

3. In the 3rd category, the writ petitioners claimed that they are bona fide purchasers of the agricultural land from M/s. Escorts Farms (Ramgarh) Ltd. in respect of land which was exempted from the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. in earlier proceedings initiated under the U. P. Imposition of Ceiling on Land Holdings Act, 1960 (hereinafter referred to as the) before its amendment by U. P. Act No. 18 of 1973 which was brought into force on 8th of June, 1973 and the aforesaid proceedings became final and could not be re-opened in the second proceedings initiated after amendment of the. In this group of writ petitions, the main contention of the petitioners counsel is that even the prescribed Authority held that it is not permissible to re-open the question regarding exemption of land granted to M/s. Escorts Farms (Ramgarh) Ltd. in the earlier proceedings on the ground that the land was being utilised for the purposes of School of Farm Mechanisation which is a separate entity. The State Government did not file any appeal against this part of the judgment of the prescribed Authority. The Commissioner in the impugned order has illegally included the aforesaid land in calculating the aforesaid area of M/s. Escorts Farms (Ramgarh) Ltd. in this 3rd Category, Group III of writ petitions, the following writ petition are categorised--

Writ Petitions No. 2464, 2465, 2466, 2477, 2478, 2643, 2644 of 1992.

Writ Petitions No. 2464, 2465, 2466, 2477, 2478, 2643, 2644 of 1992.

4. For appreciating the controversy involved in these writ petitions and the arguments urged on behalf of the petitioners counsel the necessary facts, as stated in the leading writ petition, giving rise to these writ petitions are being noticed hereinbelow :

Vide Government Order No. C-4599/xii-A-261-1950, dated 29-8-50, the Government of Uttar Pradesh granted, under the Crown Grant Act, now known as Government Grant Act, issued a grant for an area of 2091 acres in the name of M/s. Ramgarh Farms and Industries Ltd. The term of the grant, inter alia, imposed a condition that the land shall be re-claimed before 30th of November, 1951. The reclamation of the land as well as its sowing had to be completed within a stipulated period, the earmarking of the area and its possession was offered forthwith, M/s. Ramgarh Farms and Industries Ltd. did not take possession of the land till 15-3-1951. The area handed over comprised of some land which had already been reclaimed by the Government. Tractors and operational cost of the same amounted to Rs. 50,525. Since M/s. (Ramgarh Farms and Industries Ltd. , tailed to re-claim the land, they approached Escorts (Agricultural and Machines) Ltd. , Delhi for helping them out of the predicament. An agreement as arrived at between the two parties and the same was drawn and signed on 3-7-1951 whereby a new Limited Company, namely, M/s. Esorts Farms (Ramgarh) Ltd. , (the petitioner in the leading case) was constituted and the possession of the entire land was handed over to Sri P. N. Mehta on behalf of M/s. Escorts Farms (Ramgarh) Ltd. to be constituted on 7-7-1951. The new Company completed the re- claimation of the land by 30th of November, 1951. However, M/s. Ramgarh Escorts and Industries Ltd. , failed to honour the agreement, consequent thereto a dispute arose between M/s. Escorts Farms (Ramgarh) Ltd. , and M/s. Ramgarh Farms and Industries Ltd. ,. as a result of which a Memorandum was presented to the Director, Colonization, Uttar Pradesh requesting for the transfer of the lease in favour of the new Company. On re-survey of the land, it was discovered that out of the allotted area of 2091 acres, actual measurement turned out to be only 19-11-56 acres. The rest of the area having become revulets, labras (seepage water), Government canals, roads, farm roads, etc.

5. The Government demanded a sum of Rs. 1,04,550 for development charges from M/s. Ramgarh Farms and Industries Ltd. at the rate of Rs. 50 per acre. Since a dispute was going on between M/s. Escorts Farms (Ramgarh) Ltd. , and M/s. Ramgarh Farms and Industries Ltd. , the lease was not renewed by the Government of either party nor at any stage the Government permitted the transfer of the land by M/s. Ramgarh Farms and Industries Ltd. , in favour of the petitioner in the leading writ petition. Consequently, M/s. Escorts Farms (Ramgarh) Ltd. , filed a civil suit being Civil Suit No. 26 of 1956 in the court of the District Judge, Nainital. The State of Uttar Pradesh was a party in the aforesaid suit. The matter stood as it is and the Government did not take any action either for cancellation of the lease or for taking possession of the aforesaid land given under the Crown Grants Act to M/s. Ramgarh Farms and Industries Ltd. In the record operations, the land under crops measuring 1385. 08 acres were entered in Ziman 8 (hereditary tenancy) and rest, where no crop was standing, were entered in Ziman 10-Ka (Bila Tasfia) in the name of M/s. Escorts Farms (Ramgarh) Ltd. , the petitioner in the leading case.

6. On 28th of December, 1961, the Prescribed Authority issued notice under Section 9 of the to M/s. Escorts Farms (Ramgarh) Ltd. The Act came into force only on 3rd of January, 1961. In pursuance of the aforesaid notice, a ceiling case being Ceiling Case No. 56 of 1961-62 was registered. M/s. Escorts Farms (Ramgarh) Ltd. , filed an objection to the aforesaid notice and also filed a writ petition in this Court being Civil Misc. Writ Petition No. 2668 of 1962. The said writ petition was dismissed by Honble Mr. Justice S. N. Dwivedi (as he then was) on 12-2-1964. A special appeal against the said judgment was also dismissed. The Prescribed Authority declared 1163. 42 acres as surplus land. On appeal, the matter was remanded back to the Prescribed Authority to decide it afresh.

7. The Prescribed Authority, on remand, declared only 93. 83 acres of land as surplus. and allowed 1208. 64 acres land to remain with M/s. Escorts Farms (Ramgarh) Ltd. out of which an area of 250 acres was to be excluded from the holding of M/s. Ramgarh Farms and Industries Ltd. , on the ground that the said area belonged to the Escorts Ltd. , Schools of Farm Mechanisation. This order was passed by the Prescribed Authority on 11-8-1967.

8. Aggrieved by the aforesaid order, the State Government filed an appeal. The said appeal was partly allowed on 18-3-1968 whereby the surplus area of M/s. Escorts Farms (Ramgarh) Ltd. , was enhanced from 93. 83 acres to 150. 03 acres.

9. The U. P. Imposition of Ceiling on Land Holdings Act, 1960 as amended from time to time was drastically amended by U. P. Act No. 18 of 1973. Under the amended provision, the ceiling area permissible to a tenure holder was reduced from 18. 75 acres to 12. 50 acres. In view of the amendment made by U. P. Act No. 18 of 1973, a fresh notice was issued to M/s. Escorts Farms (Ramgarh) Ltd. under Section 10 (2) of thestating therein as to why the land measuring 1123. 40 acres in terms of the irrigated land held by M/s. Escorts Farms (Ramgarh) Ltd. , be not declared as surplus land under the provisions of the amended Act. M/s. Escorts Farms (Ramgarh) Ltd. , filed objection before the Prescribed Authority.

10. All the transferees from M/s. Escorts Farms (Ramgarh) Ltd. who are petitioners in the writ petitions categorised in Groups II and III, filed objections before the Prescribed Authority under Order I, Rule 10 of the Code of Civil Procedure read with Section 37 of thefor impleading them as opposite parties in the aforesaid proceedings. These applications were allowed and all the transferees were permitted to file objections in the notice issued to M/s. Escorts Farms (Ramgarh) Ltd. These transfers were objecting to the notice issued to M/s. Escorts Farms (Ramgarh) Ltd. , on the ground that the area transferred to them by M/s. Escorts Farms (Ramgarh) Ltd. cannot be included in the ceiling area of M/s. Escorts Farms

(Ramgarh) Ltd. . The Prescribed Authority, vide its order, dated 29-6-1991 declared 878. 67 acres of land as surplus land of M/s. Escorts Farms (Ramgarh) Ltd. , and rejected the objections of M/s. Escorts Farms (Ramgarh) Ltd. and its transferees except the writ petitioners categorised in Group III in the present judgment. The Prescribed Authority in its judgment, however, held that 250 acres of land which was exempted for School of Farm Mechanisation in the earlier proceedings cannot be re-opened and as such did not include the aforesaid land in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. So far as the objections of these persons described in Group III to this judgment, no decision was taken by the Prescribed Authority. The objections were kept pending for further consideration.

11. Aggrieved by the aforesaid judgment of the Prescribed Authority, M/s. Escorts Farms (Ramgarh) Ltd. , the petitioner in the leading writ petition, and all the transferees grouped in "category ii of this judgment, filed appeals before the Commissioner, Kumaun Division, Nainital. The State Government did not file any appeal against the portion of the judgment whereby the Prescribed Authority excluded 250 acres of land left out in the earlier ceiling proceedings for the School of Farm Mechanisation from being included in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd.

12. The matter came up before me at the admission stage on the application filed on behalf of the prospective allottees of the surplus land represented by Sri P. C. Jhingaran praying for vacating the ex pane interim orders passed by this Court on 15-4-1993. After hearing the counsel for the parties, I was of the opinion that the disposal of the stay vacating application is likely involve consideration of the merits of the writ petition itself and disposal of the stay vacating application was likely to take as much time as was to be given for final disposal of the writ petitions, per agreement of the counsel for the parties, the matter was fixed for final disposal at the admission stage. Subsequent thereto, the petitioners, filed an amendment application on 9-8-1994 praying therein that certain amendments may be permitted in the writ petition. On the aforesaid amendment application. I directed that the amendment application shall also be disposed of along with the writ petitions. Petitioners also filed various applications for summoning the original records of the Prescribed Authority as well as the Commissioner, Kumaun Division, Nainital. Vide my order, dated 2-9-1994, I directed that the applications will be decided at the lime of decision of petitions. The matter was tied up with me. However, the petitioners moved some other Honble Judge of this Court, who directed that the records of the courts below may be summoned. Accordingly at the time of hearing of the writ petitions, I directed the learned Addl. Advocate General to produce the original records including the records of the court of the Commissioner, Kumaun Division, Nainital deciding the appeals. The original records have been produced in the court and have been kept in proper custody under the directions of the Court. For doing complete justice between the parties and to avoid and technicality, I allowed the amendment applications filed by the petitioners, During the course of arguments, I made it clear to the petitioners counsel that they can make their submissions also on the grounds which they have tried to urge in their amendment applications and the learned counsel for the petitioners urged all grounds taken in the writ petitions including the grounds which they have raised in their amendment applications. Though no

formal amendments in the writ petitions have been made, but all the points urged in the amendment applications are being considered in this judgment.

13. I have heard learned counsel for the petitioners. In the first two groups of writ petitions, the arguments have been led by Sri K. M. Dayal, the learned Senior Advocate, Sri P. C. Srivastava and Sri Vinod Swamp and in the third group of writ petitions, the leading argument has been advanced by Sri R. C. Srivastava, Senior Advocate.

14. Sri Rakesh Dwivedi, the learned Addl. Advocate General has appeared lor the State Government and has very ably assisted this Court in defending the orders impugned in the writ petitions. I put my appreciation on record for the assistance provided by the learned Addl. Advocate General.

15. On behalf of M/s. Escorts Farms (Ramgarh) Ltd. (hereinafter referred to as the petitioner), following points have been urged for consideration-

(1). The conditions imposed by Government letter, dated 29-8-1950 giving a grant of 2091 acres of land in favour of M/s. Ramgarh Farms and Industries Ltd. , are not binding on the petitioners, as such the transfers made by the petitioner cannot be held to be invalid on the basis that they violate the terms of the grant contained in the letter, dated 29-8-1950. The petitioners claimed that they acquired independent tenancy rights under the provisions of U. P. Tendancy Act and have become tenants of the aforesaid lands in their own rights.

(2). The sale-deeds executed by the petitioner in favour of various transferees have been wrongly held by the Prescribed Authority and the Commissioner to be invalid only on the ground that the original leases executed in favour of the transferees by the petitioner were for 18. 75 acres whereas the sale deeds were only for 12. 50 acres.

(3). The Prescribed Authority as well as the appellate court have erred in holding that the transfers made by the petitioner in favour of the transferees detailed in Group-II and Group III of the judgment, were not bona fide.

(4). The Prescribed Authority as well as the Commissioner have erred in holding that the partnership entered into between the transferees is fictitious and the transferred lands continue to be in possession of the petitioner through Sri P. N. Mehta, its Managing Director.

(5). The Prescribed Authority as well as the Commissioner have erred in holding that actual possession of the land alleged to have been transferred is not of the transferees and continues to be with the petitioner through Sri P. N. Mehta, its Managing Director.

(6). The Prescribed Authority as well as the Commissioner, Kumaun Division, Nainital, have wrongly refused exemption to the petitioner for an area of 13. 35 acres of land claimed under Section 6 (a) of the.

16. The points urged by the petitioners counsel are being dealt with in the same seriatim in which they have been urged :

Point No. 1.

17. The petitioner itself claimed its source of title over the land in dispute from a letter sent by Sri H. W. Weard-Jones, Deputy Secretary to Government, Uttar Pradesh to the Director of Colonisation, Uttar Pradesh, Lucknow (Annexure 2 to the writ petition). The aforesaid letter states that on representation being made by Sri Hari Chand Raja Singh, Raja of Kashipur, Nainital to release his land acquired for colonisation Schemes, the Government decided that an area of land aggregating 2,688 acres viz. 597 acres in village Bhagwantpur, 264. 36 acres in Ramnagar, 1,022. 64 acres in Kundeshri and 804 acres in Dohari Vakil be released in his favour and a lease be granted under the Crown Grants Act. The letter further stipulated that out of the released land, the Raja will take a hereditary lease of 597 acres lying in village Bhagwantpur and the remaining area of 2091 acres is to be leased to M/s. Ramgarh Farms and Industries Ltd. in which the Raja is also a shareholder. The aforesaid letter itself makes it clear that the land will be subject to the conditions imposed in the letter. As mentioned in the aforesaid letter, Condition No. . . ! stated that the lease will be granted under the Crown Grants Act under which the Jessees will enjoy hereditary rights with certain restrictions and limitations. Condition no. 2 provided that the lessees will have to reclaim the land within one year of the commencement of the next agricultural operations. Condition No. 3 contemplated that the lessees shall use the land granted to them only for the purposes of cultivation, horticulture, pasture, poultry and dairy farming and ancillary objects and for no other purpose. Condition No. 4 stipulated that the lesse shall not parcel out land

granted to them and their rights shall be heritable. Condition No. 5 is relevant for the purposes of the present controversy and the same is being extracted below from the letter itself-

"5. The lessees may sublet the land permissible under the U. P. Tenancy Act but may not transfer or otherwise alienate the land except with the written permission of the State Government. "

Rest of the contents of the letter are not relevant in the present context.

18. The petitioner has also contended in the writ petition that since M/s. Ramgarh Farms and Industries Ltd. , the original lessee were not able to re-claim, the land, as per conditions of the terms of the grant, an agreement was arrived at between M/s. Ramgarh Farms and Industries Ltd. and the petitioner on 3. 7. 1951 whereby a new Limited Company, came into existence, which was later mutually named as "escorts Farms (Ramgarh) Ltd. " The possession of the entire land for which lease was granted under the Government Grants Act in favour of M/s. Ramgarh Farms and Industries Ltd. was handed over to Sri P. N. Mehta on behalf of the petitioner on 7-7-1951. So it is clear that the source from which the petitioner claimed its right over the land is the lease granted under the Government Grants Act in favour of M/s. Ramgarh Farms and Industries Ltd. The terms on which the lease was granted to the original lessee are also binding on the petitioner as the petitioner cannot claim any better right than the original lessee. In this connection, the case of the petitioner itself in its objection before the Prescribed Authority is being reproduced below to make it clear beyond any field of controversy that the petitioner in its objection itself claimed the right on the basis of the Government Grant under the Government Grants Act. Objection No. 29 from the petitioners objection is being extracted below :

"29. That the entire land referred to above had been granted by the Government to the objector under Government Grants Act, 1894 but due to diverse reasons and various litigations, the rents payable by the Objector to the Government were unsettled, when the Zamindari Abolition and Land Reforms Act was applied to the area of the said lands on 26-1-1970. "

19. (This objection is not part of the record of the writ petition but has been extracted from the original record summoned by the Court. The petitioner has wilfully not filed the aforesaid objection along with the rights claimed by it).

20. In the same breath, it may be pointed out that an agreement, dated 28-3-1970 between the petitioner and Smt. Sheila May Farmie, resident of G. 37, Defence Colony, New Delhi, is on record as

Annexure III which was exhibited in the suit and marked as Ex. Kha-59 (Similar agreements were entered into by the petitioner with 50 of its lessees and were got registered on 25th of April, 1970) whereby it is mentioned that the first party has transferred by way of an oral lease all its rights in favour of second party in respect of plot of land shown as plot No. 7 in red ink. The aforesaid lease agreement itself shows that the petitioners is claiming its rights on the basis, of the Government Grant under the Government Grants Act. Some of the extracts from the aforesaid agreement are being quoted hereinbelow :

"and WHEREAS the

Government of U. P. in recognition of the position of the said Raja of Kashipur agreed to grant by way of a Grant under the Government Grants Act, 1894, an area of land measuring approximately 2688 acres to the said Raja of Kashipur.

. . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AND WHEREAS consequent on the abode, both M/s. Ramgarh Farms and Industries Ltd. , and the Raja of Kashipur approached M/s. Escorts (Agriculture and Machines) Ltd. , then a duly incorporated company, to make an agreement with them to promote a new company which was later on called Escorts Farms (Ramgarh) Ltd. , and in the meantime Escorts (Agriculture and Machines) Ltd. and thereafter the new company to be formed namely Escorts Farms (Ramgarh) Ltd. should carry out all the required agricultural operations on the entire said area of 2091 acres and complete the said operations on or about 30-11-1951.

AND WHEREAS the requisite agreement between the Raja of Kashipur, M/s. Ramgarh Farms and Industries Ltd. and Escorts Farms (Ramgarh) Ltd. , was duly executed at Nainital on 3-7-1951 and a copy of the said agreement alongwith a request by M/s. Ramgarh Farms and Industries Ltd. , and the Raja of Kashipur was made to the Government/ of U. P. to accord its sanction, to the arrangement made as above on 3-7-1951;

AND WHEREAS in anticipation of the Government sanction to the above arrangement dated 3-7-1951, the actual physical possession of the entire farm lands was handed over by M/s. Ramgarh Farms and Industries Ltd. on 7-7-1951.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AND WHEREAS in this manner Escorts Farms (Ramgarh) Ltd. , are in fact and law the Lessees of the said farm lands under the Government Grants Act on the terms and conditions as contained in the aforesaid Government documents but no formal lease-deed has yet been executed. (Emphasis added)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AND WHEREAS the First Party was otherwise also well and sufficiently entitled to grant the oral lease as dated herein and is also otherwise sufficiently and well entitled to grant the renewal of the said oral lease upto 30th June, 1974.

AND WHEREAS First party herein had orally granted, conveyed and transferred by way of any oral lease ending on 30th June, 1970, an area of 18. 75 acres as shown in blue in the plan annexed hereto wherein the said lease hold, plot is numbered in red as No. 1.

AND WHEREAS the aforesaid oral lease came into being as stated above between the parties hereto in October, 1969 and it was also then agreed that if the lessee, the Second Party herein was desirous of obtaining any renewal of the said lease for any period not extending beyond 30th June, 1974 then the First Party herein shall have no objection to grant a renewal or successive renewals of the said oral lease for any period upto 30th June, 1974 provided that in the case of any renewal, the renewed lease was to

expire by 30th June in the relevant year and further that the terms of any renewal lease would be the same as the terms and conditions as agreed at the time of the said oral lease.

AND WHEREAS it was agreed orally in October, 1969 by and between the parties hereto that the First Party herein shall have no objection to apply to the Government of u. P. to permit the absolute transfer of the right, title and interest of the First party in favour of the Second Party and subject to such permission being granted or subject to the impediment to the transfer of its rights permanently by the First Party herein being otherwise removed, the First Party herein did agree to grant, convey and transfer the said leased property, the subject matter of this deed absolutely upto the Second Party herein on the terms and conditions as herein recorded.

AND WHERE AS it is expedient to record the terms and conditions of the said oral lease and the said oral agreement for sale agreed to between the parties her to in October 1969. "

The aforesaid agreement makes it abundantly clear that the petitioner throughout was exercising its rights on the basis of the original lease granted in favour of M/s. Ramgarh Farms and Industries Ltd. and was claiming its right to lease out the land only on the basis of the aforesaid Grant.

21. In the aforesaid context for appreciating the rights conferred on the lessee under the Government Grants Act, it is necessary to refer to some of the provisions of the Government Grants Act as amended by the State of Uttar Pradesh.

"2. (1) Transfer of properly Act, 1882, not to apply to Government Grants.-Nothing contained in the Transfer of Property Act, 1882, shall apply or be deemed ever to have applied to any grant or other transfer of land of any interest therein,

heretofore made or hereafter to be made, by or on behalf of the Government to or in favour of any person whomsoever and every such grant and transfer shall be construed and take effect as if the said Act had not been passed.

(2) U. P. Tenancy Act, 1939 and Agra Tenancy Act, 1926 not to affect certain leases made by or on behalf of the Government.-Nothing contained in the U. P. Tenancy Act, 1939, or the Agra lenancy Act, 1926, shall affect or be deemed to have ever affected any rights, created, conferred or granted, whether

before or after the date of the passing of the Government Grants (U. P. Amendment) Act, 1960, by leases of land by, or on behalf of, the Government in favour of any person, and every such creation, conferment or grant shall be construed and take effect, notwithstanding anything to be contrary contained in the U. P. Tenancy Act, 1939 or the Agra Tenancy Act. 1926.

(3) Certain leases made by on behalf of the Government to take effect according to their tenor. All provisions, restrictions, conditions and limitations contained in any such creation, confermention or grant referred to in Section 2, shall be valid and take effect according to their tenor, any decree or direction of a Court of law or any rule of law, statute or enactment of the Legislature, to the contrary notwithstanding :

Provided that nothing in this section shall prevent, or deemed ever to have prevented the effect of any enactment relating to the acquisition of property, land reforms or the imposition of ceiling on agricultural lands-U. P. Act 13 of 1960, Section 2 (with retrospective effect). "

22. Section 2 (2) of the Government Grants Act, referred to above, makes it clear that any provision under the U. P. Tenancy Act or the Agra Tenancy Act shall not affect nor deemed to have ever affected any rights, created, conferred or granted, whether before or after the date of the passing of the Government Grants (U. P. Amendment) Act, 1960, by leases of land by or on behalf of the Government in favour of any person and conferment of the Grant shall be construed in accordance with its terms notwithstanding any of the provisions of the U. P. Tenancy Act and Agra Tenancy Act. This statutory provision makes it clear that the petitioner cannot claim any better right other than those conferred on original lessee, namely, M/s. Ramgarh Farms and Industries Ltd. A categorical restriction was imposed on the original lessee that the lease hold land cannot be transferred except with the permission of the State Government. The petitioner or M/s. Ramgarh Farms and Industries Ltd. , has not demonstrated at any stage that any such permission was granted by the State Government permitting them to transfer the, land. The petitioner itself is not claiming any adverse rights to the original lessee nor there is any case that any such right has matured with the petitioner on the basis of adverse possession.

23. The petitioner in the present case is only claiming that it has become hereditary tenant on the basis of the revenue entries made in the revenue records wherein the petitioner has been recorded in Ziman 8 as hereditary tenant over an area of 1385. 08 acres in the land where the crops were standing and in an area of 136. 79 acres where no crops were standing in Ziman 10-Ka (Bila Tasfia), likewise also recorded in Ziman 10 over an area of 389. 27 acres. bila TASFIA entry means that the person entered in possession of the land is without consent of the original land owner. On the basis of the aforesaid entries, the contention of the learned counsel for the petitioner is that the petitioner has become

hereditary tenant under U. P. Tenancy Act and all rights which a hereditary tenant enjoys are available to the petitioner and under Section 40 of the U. P. Tenancy Act, a hereditary tenant was authorised to lease out his land upto a period of five years.

24. This contention of the petitioners counsel is negatived by Section 2 (2) of the Government Grants Act. If the land is such which is covered by the Government Grants Act, no rights under the U. P, Tenancy Act accrues in favour of the lessee or any person claiming through the said lessee.

25. Section 3 of the Government Grants Act as amended by the U. P. Amendment by the State of Uttar Pradesh, categorically provides that no right in Government Grants shall accrue in respect of the land leased out under the Government Grants Act notwithstanding of any decree or direction of a Court of law or any rule, statute or enactment of the Legislature. The proviso only makes it clear that the provisions of the U. P. Imposition of Ceiling on Land Holdings Act (U. P. Act No. 1-3 of 1960) will be applicable to such lands also. The aforesaid provision makes it clear that the petitioner cannot claim any right over the land in dispute on the basis of any of the provisions under the U. P. Tenancy Act but the occupation of the petitioner over such lease land is subject to the provisions of the U. P. Imposition of Ceiling on Land Holdings Act, 1960.

26. The entire edifice of the submissions of the learned counsel for the petitioner is based on its claim that it has acquired hereditary rights under the U. P. Tenancy Act and on the basis of the aforesaid hereditary rights the petitioners the Transfer of Property Act or otherwise.

53. In view of the foregoing, there is no escape from the conclusion that M/s. Escorts Farms (Ramgarh) Ltd. , were not entitled to either lease the land or to sell out or transfer it in any manner. This is a very crucial point, and hits at the very heart of the case built up by the appellants. The point is determined accordingly.

28. I do not find any fault with the aforesaid finding and I do not see any justification for interfering in the aforesaid finding in exercise of my discretionary jurisdiction under Article 226 of the Constitution of India.

29. In any case, the contention of the learned counsel for the petitioner that on the basis of the revenue entries, it has acquired hereditary rights under the U. P. Tenancy Act and thereafter on enforcement of the U. P. Zamindari Abolition and Land Reforms Act, 1950 (U. P. Act No. 1 of 1951) (hereinafter referred

to as U. P. Act No. 1 of 1951), it acquired sirdari rights over the land in dispute and under the provisions of Section 134 of U. P. Act No. 1 of 1951 it deposited twenty times of rent and acquired bhumidhari rights, is being tested independent of my conclusion, that the petitioner cannot claim any rights under the U. P. Tenancy Act contrary to the provisions of the terms of the Grant.

30. In exercise of power conferred by clause (c) of sub-section (1) of Section 2 of U. P. Act No. 1 of 1951, the Governor of Uttar Pradesh issued notification that the said Act, with effect from 26th day of January, 1970, shall apply to areas under the Colonisation Scheme in the villages situate in Tehsil Kashipur, district Nainital specified in Schedule-I subject to modifications and amendments specified in Rule 2, U. P. Act No. 1 of 1951 has been enforced in the villages relating to the land in dispute by the aforesaid notification with the modifications indicated in the aforesaid notification. The application of sections 4 to 112 of Chapter II to VI in Part I of U. P. Act No. 1 of 1951 stands deleted by the aforesaid notification in the area where the land in dispute was situate.

31. Section 131 of U. P. Act no. 1 of 1951 in its amended form, inter alia, provided that a hereditary tenant or a lessee holding a lease under the provisions of the Government Grants Act, 1895, and having rights of a hereditary tenant under the terms of the lease, but possessing the right not to transfer the holding by sale, shall have all the rights and be subject to all the liabilities conferred or imposed upon such bhumidhars by or under this Act.

32. The question which involved consideration in the present context is, can the petitioner claim itself a hereditary tenant or holding a lease under the provisions of the Government Grants Act.

33. I have carefully examined the original objection filed by the petitioner before the Prescribed Authority in response to the notice issued by the Prescribed Authority under Section 10 (2) of the. There is not a whisper in the aforesaid objection regarding petitioners demonstrating that it became hereditary tenant under the U. P. Tenancy Act. The petitioner also does not claim itself to be the lessee holding the lease under the provisions of the Government Grants Act. The papers on record also show that no such lease was granted in favour of the petitioner. However, the contention of the petitioner in this regard need not detain me for further detailed examination of the petitioners contention in this regard in view of a statutory prohibition imposed by U. P. Act No. 1 of 1951 mandating that no person will acquire bhumidhari sirdari rights over the Government land. Section 133- A was added in U. P. Act No. 1 of 1951 by U. P. Act No. 37 of 1958. For convenience, the said provision is being reproduced below:-

"133-A. Government lesees.- Every person to whom land has been let out by the State Government shall be called a Government lessee in respect of such land and shall, notwithstanding anything to the contrary contained in this Act, be entitled to hold the same in accordance with the terms and conditions of the lease relating thereto.

34. An analysis of the provisions of the Government Grants Act makes it clear that the provisions of the U. P. Tenancy Act notwithstanding a lessee under the Government Grants Act will not acquire any right on the basis of his being treated a hereditary tenant under the Grant. U. P. Act No. 1 of 1951 has also prohibited any such conferment of right by legislating Section 133- A in U. P. Act No. 1 of 1951. At the cost of repetition, it is being stressed that the petitioner never claimed any right better than the original lessee. The petitioner at best stood in the shoes of the original lessee i. e. , M/s. Ramgarh Farms and Industries Ltd. , and since the original lessees were prohibited from claiming any right either under the Tenancy Act or U. P. Act No. 1 of 1951, the petitioner cannot be permitted to claim any such right. The analysis of the aforesaid facts also show that the Government never consented for change of the lease in favour of the petitioner and the petitioner continued in possession of the land without authority of law. However, this issue is out of context in the present matter and is being left as it is.

35. The learned counsel for the petitioner has also placed reliance on Section 230- A and Section 240-A of U. P. Act No. 1 of 1951 as applied in the area where the land is situate for contending that the petitioner acquired sirdari rights by virtue of the aforesaid two provisions. Section 230- A contemplated that-

"every person who on the date immediately proceeding the appointed day.-

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) was recorded as occupant of

any land. . . . . . . . . . . . . . . . . . . . ,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . held by a tenant or lessee referred to in sub-clauses (iii) to (v) of clause (b) of Section 130 or by a tenant or lessee referred to in clause (a) of Section 131 in the khasra or khatauni or 1374 Fasli prepared under Sections 28 and 33, respectively of the U. P. Land

Revenue Act, 1901, shall unless, he has become an asami under sub-clause (vi) of clause (a) of Section 133 be called adhivasi of the land and shall, subject to the provisions of this Act, be entitled to take or retain possession thereof. "

36. Section 240- A is also being reproduced for convenience as applied in the area:-

"240-A. Acquisition of rights, title and interest of land- holder in the land held by adhivasi.- (1) As soon as may be after the appointed day, the State Government may, by notification published in the official Gazette declare that as from a date to be specified therein the rights, title and interest of the land- holder in the land which, on the date immediately preceeding the said date, was held or deemed to be held by an adhivasi, shall as from the beginning of the date so specified (hereinafter called the appointed date), shall cease and vest, except as hereinafter provided, ,in the State free from all encumbrances.

(2) It shall be lawful for the State Government, if it so considers necessary, to issue, from time to time the notification referred to in sub-section (1) in respect only of such area or areas as may be specified and all the provisions of sub-section (1) shall be applicable to and in the case of every such notification. "

37. The learned counsel for the petitioner has fairly conceded that the notification for conferring sirdari rights in respect of the area where the land is situate was issued in the year 1976 under Section 240- A (See 1976 (V) L. L. T. page 450). So under the aforesaid provision also the petitioner cannot claim to have acquired any Sirdari right on the date the petitioner deposited twenty times of rent to become Bhumidhari of the land in question. Reference to the aforesaid provision is wholly out of context for the purposes of the controversy involved in the present writ petition. The petitioner did not acquire any right under the aforesaid provision neither the petitioner claimed it nor any factual foundation was laid in the objection before the Prescribed Authority nor any evidence to that effect was led.

38. On the aforesaid analysis, I am definitely of the view that the land involved in the present matter was a land covered- by the Government Grants Act. The original lessee under the Grant was prohibited from making any transfer of land except with the sanction of the State Government. No such sanction was ever granted by the State Government. The petitioner under a private arrangement continued to be in possession of the aforesaid land and cannot claim any better right than the original lessee. The terms and conditions on which the Grant was made in favour of the original lessee are binding with all force on the petitioner under the provisions of the Government Grants Act. Neither the original lessee nor the petitioner could acquire any right under the U. P. Tenancy Act over the land in question. The petitioner

itself claimed to have stepped into the shoes of the original grantee and executed leases in favour of several persons representing that they are stepping into the shoes of the original grantee, namely, M/s. Ramgarh Farms and Industries Ltd. , and is awaiting sanction of the State Government permitting such transfers. I am also of the categorical view that the petitioner did not acquire any Sirdari rights after the enforcement of U. P. Act No. 1 of 1951 in the area, as such the petitioner was not entitled for conferment of any Bhumidhari right. The proceedings under which the petitioner was conferred with Bhumidhari rights and was recorded as sirdari, was wholly void and contrary to the provisions of the statute and all such proceedings are nullity in the eye of law. Since the petitioner did not acquire any right over the land either as sirdar or as Bhumidhari, all transfers made by the petitioner are null and void and cannot be termed by any stretch of argument to be bona fide transfers.

39. The transfers made by the petitioner in favour of the petitioners detailed in Groups II and III writ petitions were patently illegal, void and contrary to the mandate of the Government Grant Act. The transfers also did not acquire any bona fide sirdar or bhumidhari right on the Government land on the basis of such transfers. The entire edifice of the petitioners case contending that. the transfers made by it were bona fide falls through on the analysis of this point alone.

40. Before parting with this point, it is necessary to refer to the contention of the learned counsel for the petitioner that if the petitioner was not a tenure holder but was a lessee or a person stepped into the shoes of the lessee the provisions of the act will not apply. This contention is belied by the provisions of the Government Grants Act, referred to earlier, where it is specifically mentioned that the provisions of the will apply to the Government Grant land also.

Points No. 2 to 5 :

41. The aforesaid points are inter connected with each other, so they are being dealt with together. The petitioners contention is that in 1953-54. the record operations were carried and the entire land in dispute was found to be in possession of the petitioner and was recorded in the name of the petitioner since 1361 F as hereditary tenant under the U. P. Tenancy Act. By virtue of Section 40 of the U. P. Tenancy Act, the petitioner was authorised to grant leases upto five years. Under Section 56 of the U. P. Tenancy Act, only leases for more than one year were required to be registered. The contention of petitioners counsel is that under the U. P. Tenancy Act, a lease for a term for not exceeding one year could be granted orally coupled with delivery of possession and such leases did not require registration or a lease in writing. In. the instant case, the petitioners case is that initially the petitioner granted leases for an area of 18. 75 acres in favour of 50 persons in October, 1969. The agreement, referred to earlier, shows that it also mention that along with the said oral lease, an agreement for sale was agreed

between the petitioner and 50 lessees for an area of 18. 75 acres of land and possession of the land was delivered to the lessees. The petitioners further contention is that it was agreed between the petitioner and the said lessees that the petitioner will be prepared to transfer by way of conveyance the agreed area of land at a fixed rate of Rs. 3,000 per acre to the said lessees or their nominees, if the law at any time, during the tendency of the lease, permitted it or the said renewed lease permitted such a conveyance. The petitioners further contention is that those lessees sought renewal of their leases for a full period of five years, consequent thereto agreement was entered into between the petitioner and these lessees and was got registered on 28-3-1970 (This agreement has been referred to earlier in the judgment). Thereafter U. P. Act No. 1 of 1951 was enforced in the area, consequent thereto on 26- 1- 1970. the petitioner claimed to have become sirdar of the entire land and after acquiring bhumidhari rights, sold the entire land in favour of 74 persons of an area of 12. 50 acres for each transferee. This transfer was effected by registered instruments in the last week of September, 1971. Petitioners further contention is that since initially 50 lease holders were not equipped fully, the Company also offered mechanical help of operation by providing tractors after receiving proper consideration. According to the petitioner physical possession of the land was handed over to all the 50 original lessees of an area of 18. 75 acres, who farmed three partnership firms, named Northern, Western and Eastern Farms and regular partnership deeds between all the partners were drawn and partnership started functioning independently. Thereafter in view of the provisions of the prohibiting transfer of more than 12. 50 acres of land, the original lessees agreed for foregoing their excess part of the lease hold land and thereafter the entire land was sold in favour of 74 persons which included the names of the original lessees. In view of fresh agreement, sale-deeds in favour of 74 persons, the earlier three partnership were dissolved and fresh four partnerships were constituted, named as Southern Farm, Northern Farm, Western Farm and Eastern Farm. All these partnerships had their separate General Manager-cum- Managing Partners, separate Account Books, separate cultivation, separate staff, separate supply of cane through cane marketing society and their accounts being audited individually and each individual partner has been enjoying profits out of these partnerships. The contention of the petitioner is that all these transferees either themselves or through power of attorney have appeared before the Prescribed Authority and have stated on oath that they are in imposition of the land since the date the original lease was granted to them. The transfers were made in their favour only in pursuance of the agreement arrived at much earlier than 24-1-1971, as such all these transfers were bona fide. The Prescribed Authority as well as the Appellate Authority have taken a perverse view of the facts and law holding the transactions to be sham.

42. The petitioners counsel has pointed out the details on the basis of which it can be demonstrated that the land was actually transferred in favour of the original lessees and thereafter in favour of the transferees and the partnerships constituted by them were genuine partnerships which were permissible in law. The first contention of the petitioner is that all those transferees either themselves or their attorney holding power on their behalf, have appeared in the witness box and have stated on oath that they have purchased the land for consideration at the rate of Rs. 3,000 per acre which was the prevailing market value and they are in possession of the land and are continuing with the possession of

the same. Their statements. were never confronted by any cross-examination or controverted by any cogent evidence of the State Government. The counsel for the petitioner has strenuously pointed out that even the Lekhpal of the area has recorded possession of these lessees and transferees at the relevant time in the records and the payment for the consideration was made by all these persons mostly through cheques and Bank Drafts in favour of the petitioner. All these payments have been entered in the balance sheet of the petitioner-Company and the petitioner-Company has paid income- tax on the aforesaid receipts. The petitioners counsel has also referred to and relied upon the statement of Sri P. N. Mehta, who was initially the Managing Director of the petitioner-Company authorised to manage the entire Farm. According to the petitioner Sri P. N. Mehta has stated and proved that at the end of the year 1967 certain employees with communist trend had trickled in, and in 1968 a labour union was formed which was unheared of as far as agricultural farms are concerned and the union activities have resulted in transforming the labourers from loyal, obedient and hard working employees to adopting a militant and quarrelsome altitude towards the supervisors and even the Management. All this resulted in fall of output of the Company. Consequently Sri P. N. Mehta wrote a letter as far back in the year 1969 bringing on record of the petitioner Company that future of the firm is not safe as it may result in unbearable losses and a decision may be taken in the matter. Consequently, the Directors of the petitioner in a meeting held on 1-2-1969 resolved to dispose of by transfer or otherwise the land on such terms as Sri P. N. Mehta in his opinion may deem fit uplo a maximum area of 1000 acres. Sri P. N. Mehta was authorised to execute documents on behalf of the Company. In the aforesaid background initially leases were granted by Sri P. N. Mehta to all the 50 persons for an area of 18. 75 acres in October, 1969. Then after obtaining Bhumidhari rights, the petitioner wanted to sell off the land in favour of those original 50 lessees but since it was not permissible in view of Section 54 of the U. P. Act No. 1 of 1951, the transfers were made for an area of 12. 50 acres of land in favour of 74 persons in September, 1971. All these transfers are by registered instruments and the transferor has mentioned therein that it has received the consideration money, the receipt of the sale consideration has duly been recorded in the account books of the petitioner. These account books were duly audited by the Chartered Accountant and have been filed with the Registrar of the Companies.

43. The petitioner accordingly submitted that all the transfers made by the petitioner were bona fide transfers and were made by irrevocable instruments. There is no evidence worth the name for showing that the petitioner continued in possession of the land after the transfers. There was no justification for the courts below to have held that these transfers were fictitious or sham. The learned counsel for the petitioner has placed strong reliance on several decisions of this Court and has laid stress that in view of the law laid down by the Honble Supreme Court in Brijendra Singh v. State of U. P. A. I. R. 1981 SC 636, [LQ/SC/1980/472] the transfers could not have been held to be sham or fictitious. The petitioners counsel has taken pains in pointing out the relevant entries in the petitioner-Companys balance-sheet regarding receipt of lease money as well as the sale consideration and has submitted that the authorities, below have not considered these documents in their correct perspective and on the basis of wrong assumptions have reached to a conclusion that the transactions are not bona fide, the said conclusion is contrary to record

and is liable to be quashed in exercise of discretionary jurisdiction of. this Court under Article 226 of the Constitution of India by issuing a writ of ceniorari.

44. Learned Additional Advocate General has controverted these submission and has submitted that the records itself speak that all these transactions were sham and were only a device by the petitioner to save the Companys land from the law of ceiling and most of the transferees were either relatives to or connected with the proprietor of the Company Mr. Nanda and its Managing Director Mr. P. N. Mehta.

45. Before testing the aforesaid submission, it is necessary to refer to the relevant provisions of the. Section 5 with its Explanation-II and sub-section (6), relevant for the present controversy, are being reproduced below :

5. Imposition of Ceiling.- (1) On and from the commencement of the Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1972, no tenure-holder shall be entitled to hold in the aggregate throughout Uttar Pradesh, and land in excess of the ceiling area applicable to him.

Explanation I. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Explanation II.-If on or before January 24, 1971, any land was held by a person who continues to be in its actual cultivator possession and the name of any other person is entered in the annual register after the said date either in addition to or to the exclusion of the former and whether on the basis of a deed of transfer or licence or on the basis of a decree, it shall be presumed, unless the contrary is proved to the satisfaction of the prescribed authority, that the first mentioned person continues to hold the land and that it is so held by him ostensibly in the name of the second mentioned persons.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In determining the ceiling area applicable to a tenure- holder, any transfer of land made after the twenty-fourth day of January, 1971, which but for the transfer would have been declared surplus land under this Act, shall be ignored and not taken into account :

Provided that nothing in this sub-section shall apply to-

(a) a transfer in favour of any person (including Government) referred to in sub-section (2)

(b) a transfer proved to the satisfaction of the prescribed authority to be in good faith and for adequate consideration and under an irrevocable instrument not being a benami transaction or for immediate or deferred benefit of the tenure-holder or other members of his family.

Explanation I.-For the purposes of this sub-section, the expression transfer of land made after the twenty-fourth day of January, 1971, includes-

(a) a declaration of a person as a co-tenure holder made after the twenty-fourth day of January, 1971 in a suit or proceeding irrespective of whether such suit or proceeding was pending on or was instituted after the twenty-fourth day of January, 1971 (b) any admission, acknowledgment, relinquishment or declaration in favour of a person to the like effect, made in any other deed or instrument or in any other manner.

Explanation II-The burden of proving that a case falls within clause (b) of the proviso shall rest with the party claiming its benefit. "

46. In the present case, all the transfers made by the petitioners in favour of the transfers of Group II and Group III writ petitions have been made in the last week of September, 1971 i. e. , after 24th of January, 1971. The burden of proving that the transfers were bona fide was clearly on the petitioner and its transferees. For judging the question of transfers to be bona fide, the first thing which is required to be considered is whether the petitioners had any right to transfer or the transfers made by the petitioner were clearly violative of the provisions of the Government Grants Act and the terms of the

lease granted in favour of the original lessee i. e. M/s. Ramgarh Farms and Industries Ltd. in whose shoes the petitioner claimed to have placed itself. This point has been discussed in detail in connection with the first point of the judgment which amply demonstrates that the petitioner made leases in favour of 50 persons for an area of 18. 75 acres of land and later on executing sale deeds in favour of 75 persons in clear violation of the Government Grants Act as well as these leases were in clear violation of the terms of the lease granted in favour of the original lessee, namely, M/s. Ramgarh Farms and Industries Ltd. If the transfers are in violation of the provisions of law such transfers can never be treated to be bona fide transfers.

47. However, for considering the nature of transactions, which the petitioner claimed to be bona fide, certain other facts also need to be examined.

48. The petitioners has filed the Minutes of the Meetings of its Board of Directors held on 1-2-1969 and 30-8-1969 before the Commissioner, Kumaun- Division, Nainital. The relevant extracts from the aforesaid proceeding being extracted below for convenience reference :

"sri P. N. Mehta, who is present today by special invitation, has given details to the Directors about the land of the Farm. After considering the matter fully, it is resolved that Sri P. N. Mehta be and is hereby authorised to dispose of by transfer or otherwise on such terms as he may in his discretion deem fit. Parcels of the farm land held by the Company to such person or persons as he may consider fit upto a maximum area of upto 1000 acres for this purpose. "

"the Directors having given their anxious consideration to the problem and apprehending the imposition of ceiling on properly in conformity with the general political and economic climate of the country resolved that parties willing to obtain leases in conformity with the above may be entertained with agreements granted to the parties conferring on them the rights to acquire the properly so leased immediately. "

49. On the basis of the aforesaid proceedings, the Commissioner, Kumaun Division, Nainilal has recorded a finding of fact that the aforesaid leases in favour of 50 persons were not made in view of any genuine pressing necessity to dispose of the land in view of the labour unrest, instead of it was only a device to save the land from the clutches of ceiling law as the Company apprehended the imposition of ceiling on property in conformity with the general political and economic climate of the country. In the aforesaid background, a reference may be made to the political history of the Country that in the year 1969, there was a split in the India National Congress and late Prime Minister Smt. Indira Gandhi formed a parallel

Congress which was recognised as Indian National Congress (I) and in its political agenda, she declared that ceiling area of the agricultural land will be reduced. A resolution to the said effect was passed only on 24th of January, 1971 where in the Indian National Congress (I) adopted a Manifesto on 24-1-1971 to reduce the ceiling limit on the agricultural holding. It was thus known to all concerned even in 1969 that ceiling limit in regard to agricultural land was going to be reduced very soon. The Directors of the Company were conscious of this climate and only as a device to save the land from the ceiling area, these alleged oral leases were contemplated in favour of 50 persons.

50. Section 40 of the U. P. Tenancy Act, on which reliance has been placed by the learned counsel for the petitioner, is being reproduced below for examining the correctness of the submission that oral leases were permissible under the provisions of the aforesaid Act by hereditary tenants:

"40. Restriction on sub-letting.- (1) No occupancy tenant in Agra, or ex-proprietary tenant or hereditary tenant shall sub-let the whole or any portion of his holding for a term exceeding five years, or within three years of any portion of such holding being held by a sub-tenant.

51. This section permits subletting only by hereditary tenant for a term not exceeding five years. The section did not contemplate permitting any oral lease for a period less than one year. Assuming for arguments sake that such an oral lease was permissible, but how such an oral lease can be justified by a Company like the petitioner whose affairs were being managed by a competent Managing Director like Sri P. M. Mehta and particularly no record of the company has been produced before the authorities below to establish that such oral leases were granted in favour of 50 persons. The exact date on which these oral leases were granted is not known and no contemporary revenue records recording of such oral leases have been produced before the authorities below nor my attention has been drawn towards any such record nor any mention has been made in the judgments of the authorities below that the petitioner placed any reliance on any such records. The only documentary evidence which the petitioner has filed to prove the said oral lease is a registered Memoranda-cum-Lease Deed executed on 28th day of March, 1970 between the petitioner and several leassees wherein it is mentioned that oral leases were granted to the lessees in October, 1969. It is relevant to mention here that this document had been executed after enforcement of U. P. Act No. 1 of 1951 in the area. Since the petitioner had throughout in his mind that the ceiling limit of the agricultural land is to be reduced, it was consciously making device to get out of the clutches of the ceiling law. In the aforesaid background the petitioner got executed the Memoranda-cum-Leases in favour of 50 persons. The names of these 50 lesses are detailed in Schedule C of the objection filed by the petitioner before the Prescribed Authority. Some of the names need mention here :

(1) Smt. Dolly Nanda, widow of late Sri Y. R. Nanda

(2) Km. Sita Nanda, d/o Sri Y. R. Nanda

(3) Km. Maljni Nanda, d/o Sri Y. R. Nanda

(4) Mrs. Rani Chibbar, w/o Sri O. P. Mehta

(5) Mrs. Krishna Kapoor, w/o. Sri Raj Kapoor

(6) Mrs Indu Hazari, w/o Sri C. R. Hazari

(7) Sri Deepak Mehta, s/o Sri P. N. Mehta.

(8) Sri Sashi Kapoor, s/o. Sri Prithiraj Kapoor.

(9) Miss Nini Nanda, d/o Sri H. P. Nanda.

(10) Mrs Reetu Nanda, w/o Sri Rajan Nanda.

(11). Sri Randhir Kapoor, s/o Sri Raj Kapoor.

52. Except few, most of the lessees are residents of Delhi or Bombay and most of them are related to Sr. H. P. Nanda or Sri P. N. Mehta. Sri H. P. Nanda is the proprietor of the majority of the shares of the Company and Sri P. N. Mehta is its Managing Director, in the same breath, it may be noticed that three partnerships were constituted by these so-called lessees on 8-5-1970. The first partnership was constituted between Sri Ashok Mehta s/o Sri P. N. Mehta and 18 lessees, prominent amongst them are

Mr. Randhir Kapoor s/o Sri Raj Kapoor Mrs. Krishna Kapoor w/o Sri Raj Kapoor, Sri Shashi Kapoor s/o Sri Prithviraj Kapoor, Mrs. Reetu Nanda w/o Sri Rajan Nanda, Mr. Ajit Mehta w/o Sri Hari Bansh Singh Mehta and so on. The contents of the partnership also deserve reference. It was agreed in the said partnership that the Managing Partner of the business shall be Sri Ashok Mehta, son of Sri Prem Nath Merita. The Managing Partner was authorised to execute and register all deeds, agreements and other documents, open Bank accounts in connection therewith, to sign all documents, such account to be opened in any Back that the Managing Partner may, in his discretion deem fit and to close any such accounts. The Managing Partner shall be entitled to mortgage, charge or otherwise encumber any properly of the partnership in connection with the business. The partnership was initially agreed to be for a duration of five years expiring on 30-6-1975 and before the expiry of the said period, no partner shall be entitled to dissolve the partnership and no partner shall be entitled to transfer by sale, mortgage or otherwise his interest, either in the property or in the land which has been given over by the concerned partner to the partnership unless 2/3 of the partners agree to such dissolution or transfer. It was also provided that in case of any dispute in the partnership, the dispute shall be referred to the sole Arbitration of Sri. H. P. Nanda, son of Sri B. I. Nanda, resident of 12 Jor Bagh, 5new Delhi. All powers were conferred on Sri. H. P. Nanda for resolving any dispute or deciding the same without following any procedure or keeping record.

53. The contents of the Partnership show that it was a managed show between Sri H. P. Nanda, the real Proprietor of the Company, and its Managing Director Sri P. N. Mehta, who got executed these documents to save land from ceiling area.

54. Just a look on the names of the alleged lessees, shows that most of them were closely related to Sri H. P. Nanda and Sri P. N. Mehta. They were not in a position to do cultivation. Most of these lessees have not appeared in the witness box. Some persons holding power of attorney have stated on their behalf that they were in possession of the land from the date the oral leases were executed in their favour.

55. From perusal of clauses 8, 12, 13, 14, 15, 17, 18 and 24 of the partnership deed, it is abundantly clear that the terms of the partnership are unusual, it is more like sole proprietor firm of which the Managing Director has all the say and the sole proprietor, namely, Sri H. P. Nanda is in command of the entire situation to ensure that no lessee ever claims or asserts any right of cultivation over the area. The terms of the partnership were clearly unusual and itself creates a doubt on the genuineness thereof.

56. Learned counsel for the petitioner has laid stress on an entry of the balance-sheet of the Company for the year ending on June 30, 1970 wherein in Profit and Loss Account, an item is mentioned that Rs. 92,560 have been received towards lease money. On the basis of the aforesaid entry, learned counsel

for the petitioner strenuously submitted that the genuineness of the oral leases is borne out from the record of the Company, the entries in the Balance sheet cannot be discarded on conjectures, The said submission stands nullified by the document of the petitioner itself. The registered _ Memoranda-cum- Lease Deed, - dated 18-3-1970. referred to earlier, mentions "that the first party (petitioner) herein shall in this manner recover the sum of Rs. 3750 as the lease money for the period ending 30th June, 1970 from the Second party (lease)". If this amount is multiplied by 45g alleged lessees, the amount will come to Rs. 1,87,500 and the entry of Rs. 92,000 in the Balance-sheet does not co-relate with the. ease money in the present matter. The mere entry of the lease money in the Balance sheet of the Company like the petitioner cannot lead to an inference that the lease money was in respect of the land leased out by the petitioner Company. In this context, a reference may also be made to the statement of Lekhpal examined on 30-3-1991 on whose statement, petitioners counsel has laid streets wherein he has staled that the transferees are in possession of the land and their names are recorded in the revenue records of the year 1397 Fasli i. e. year 1990. The Lekhpal had given statement in 1398 F i. e. year 1991 and at that time he had stated that the transferees are in possession and the names of the transferees are recorded on the land in question. Under the provisions of the U. P. Land Revenue Act, mutation of the names of the tenure holders are made by the revenue authorities for purposes of collecting revenue. On the basis of the aforesaid revenue entries only, no rights can be inferred in favour of the persons so recorded* In any case, the statement of Lekhpal is to be construed in the light of the transferees own statements wherein they have admitted that they have entered into partnerships and they are in possession of the land through partnerships. Regarding the bona fides of the partnerships, necessary discussion has already been made earlier in this judgment. In the same continuation, it may be stated that the petitioners own case is that partnerships were registered between the three sons of Sri P. N. Mehta on one hand, who were appointed as Managing Directors, and remaining 50 lessees in Group III writ petitions. These partnerships were constituted after enforcement of U. P. Act No. 1 of 1951. Section 154 of the U. P. Act No. 1 of 1951 provided that no bhumidhari shall have the right to transfer any land by sale or gift to any person where the transferee shall, as a result of such sale or gift, become entitled to land which together with land, if any, held by his family will in the aggregate, exceed 12. 50 acres in Uttar Pradesh. Under the aforesaid provisions, the sale deed could not have been executed in favour of 50 persons for an area of 18. 75 acres. So immediately when the occasion arose for selling out the land, the three partnerships were dissolved on 3-11-1971 and new partnerships were constituted on 4-12-1971 to bring in the partnerships within the four corners of the U. P. Act No. 1 of 1951. No rhyme or reason was recorded for dissolving the three partnership and all accounts etc. , were finalised in one day in the same manner in which initially the three partnerships were formed constituting different persons on the same day. Various sale-deeds in favour of 74 persons were executed on 27-9-1971, 1-10-1971, 5-12-1971 and 14 sale-deeds were executed in the year 1972. The four partnerships came into existence on 4-12-1971 even prior to execution of the sale-deeds. No explanation has been given as to how the earlier lessees forgave their rights in favour of other persons on what consideration and even before sale deeds were executed in favour of 74 persons, who constituted the four partnerships. The sale-deeds were made in favour of 74 persons for the same land which was leased out to 50 persons. The submission of the learned counsel for the petitioner is also that these lessees also got independent right to become Sirdar after enforcement of U. P. Act No. 1 of 1951, under Section 230- A. It is surprising that these 50 persons readily agreed to forgo their claim over the

excess area of land and without any consideration agreed to purchase only 12. 50 acres of land and remaining land was sold out to other lessees who were again related to aforesaid Sri P. M. Mehta and Sri H. P. Nanda and the three partnerships which were contemplated for 5 years were immediately dissolved and four partnerships in the same terms in which earlier partnerships were constituted were formed of which another son of Sri P. N. Mehta was also appointed as Managing Director. This again strengthens the conclusion drawn by the appellate authority that these partnerships were fake and only a device of the petitioner to get out of the clutches of the.

57. Learned Addl. Advocate General has placed reliance on some decisions of the Honble Supreme Court in regard to the assessment of the income tax in respect of the companies wherein the Supreme Court has held that in appropriate cases,, the Tax Authorities can lift the veil of the Company and find out the real owner. The learned Addl. Advocate General has further submitted that doctrine of lifting of veil can be applied to other fields also and is not confined to cases of evasion of tax, suffice it to mention only one of the decisions cited by the learned Addl. Advocate General for lifting of veils in other fields than evasion of tax [see AIR 1978 page 1737, paras 63 to 66]. In the present case the court is entitled to lift the veils of the alleged partnerships and come to the conclusion that real proprietor and beneficiary of the aforesaid partnerships was Sri P. N. Mehta and his sons under the control of Sri H. P. Nanda, who are respectively Managing Director and virtually the proprietor of the petitioner company.

58. The submission of the learned counsel for the petitioner that a regular account of the partnerships was kept and all the partners were getting profits out of the earnings of the Farms is also not supported by any positive evidence. On the other hand, the documents filed with the amendment application as the Balance-sheet of the partnerships of 30-6-1972 only show a loss of Rs. 3,965. 41. Likewise in other Balance-sheets, the profit and loss of the company are shown and in the partners account, either the partners capital account is reduced or increased, but there is no proof of actual payment of any profit to any of the partners. This shows that the entire exercise was jugglery of the mind of the Managing Director of the Company Sri P. N. Mehta. Likewise in the various sale deeds, it is mentioned that the transferee is executing a promote in favour of the transfer for ensuring payment. In this context, reference may be made to Annexure T to the Amendment Application wherein the statement of Kavita Singh, one of the transferees and the petitioner in one of the writ petitions of Group II petitions, has been incorporated. In her cross-examination Kavita Singh has stated-that the sale-deed was executed by Sri P. N. Mehta on behalf of the Company. She came to know through her mother that Escorts is going to sell out its land. She admitted that she had issued any cheque in favour of Escorts Company.

59. Let it also be examined as to whether any sale consideration passed in favour of the petitioner by the transferees. It was obligatory on the part of the petitioner or the transferees to have given the details of the cheques and drafts etc. , to show that any amount was received by the Company. No details or chart has been filed by any of the petitioners. The mere oral statement of the transferees

cannot prove the actual payment, particularly in the types of the sale-deeds where the transferees only agree to pay the sale consideration by executing a promissory note. Mere entries in the balance-sheet regarding receipt of the money is not a proof of passing of the sale consideration. The best evidence for proving that the sale consideration was passed on in the aforesaid transactions were details of the cheques and drafts by the petitioners claimed to have received the sale consideration. The petitioner has withheld the best evidence and has only placed reliance on the entry of the balance-sheet showing receipt of Rs. 25,71,581 which itself is not a proof of actual money received. It may again be jugglery of the entries in the Account Books as most of the sale deeds themselves demonstrated that the transferees only promised. to pay sale considerations only by executing pronotes in favour of the petitioner company. The submission of the petitioners counsel that the petitioner has paid a capital gain tax on the amount of Rs. 25,71,581 is also not borne out from the record as no assessments order has been filed on behalf of the petitioner nor there is any evidence to show that the petitioner had paid tax on the said amount. Even assuming that the Company decided to pay certain tax for retaining twelve hundred acres of Tarai Area, the value of which is in several Crores many times more the amount of tax which the petitioner claims to have paid on the alleged capital tax.

60. In the aforesaid background, the Appellate Authority has examined in great detail all the submissions of the learned counsel for the petitioner which the petitioner has raised before it and on considering all the aforesaid circumstances, the Appellate Authority has recorded categorical findings of fact that the constitution of the partnerships and the alleged transfers were sham and the petitioner has failed to prove that the transactions were in good faith and for adequate consideration. Some of the findings of the Appellate Authority are being extracted below:

"65. These facts taken together leave one with no option but to conclude that M/s. Escons Farms (Ramgarh) Ltd. decided to sell off the land in order to evade the provisions of the Ceiling Act, that the transferor never really divested himself of interest in the land including cultivatory possession, and that the alleged transferees conveniently regrouped thereafter for obvious reasons. Indeed, the form setting- up of the Partnerships itself (and that, too, so soon after the alleged transfers) is an indication that the initial transfers themselves were void and mala fide. It is only logical to conclude also that this arrangement was not at all independent of the original transferor.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67. Respectfully taking guidance from this observation, it cannot but be stated that in the instant case none of the possible ingredients are present. The transferors have ostensibly tried to show that they have not retained any interest in the land after the transfer, but all circumstances of the case, as discussed in detail in this judgment, unerringly point to the contrary, leading one to the reasonable inference that the transactions were not bona fide and were intended to evade the provisions of the Ceiling Act. This would also explain the veil sought to be imposed oh the relationship amount the parties/appellants. The point is determined accordingly.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

73. In the instant appeals being considered by this court, the situation is different, for it is evident on the basis of the analysis already recorded above, that the transfer of land by M/s. Escorts Farms (Ramgarh) Ltd. , to the 74 persons was not done "in good faith", and it was clearly an attempt to circumvent the provisions of the Ceiling Act. . . . . . . . . . . . . . . . .

75. As far as the recorded addresses of the transferees is concerned, a perusal of the sale-deeds reveals that these 74 persons are almost all residents of places other than district Nainital in which the land in question is situated. However, when these persons filed objections before the Prescribed Authority, they claimed that they were residents of the area where the land is situated. It is another matter whether such claims can be taken at face value.

76. To take a few representative examples, Sri Sashi Kapoor, Son of Sri Prithviraj Kapoor is described as a resident of Bombay in the sale deed. In the objection filed years later under Section 10 (2) before the Prescribed Authority he is described as being a resident of western Farms, village Dohri Vakil, Kashipur, Smt. Kavita Singh w/o Sri Jogindar Singh is recorded in the sale-deed as being a resident of Kanpur. In the original lease deed relating to Smt. Premi Talwar it is recorded that she is a resident of Calcutta. Smt. Bimla Dhawan is recorded in the lease deed as being a resident of New Delhi. Later, in the objection dated 5-12-1975 under Section 10 (2) of the Ceiling Act, filed before the Prescribed Authority/s. D. O. Kashipur, she is described as being a resident of Eastern Farms, village Pachchawala, and so on.

79. If one were to look at other evidence on record, it is seen that the transferees were, not aware of the details of the farming being done in the land. Smt Kavita Singh is on record in the files of case before

the learned Prescribed Authority as having stated that she had not made. Any payment to the (Farm) Partnership she had joined, nor had she received any cheque from them. It is also significant that none of the counsel for the appellants, in their arguments in this court, were able to throw any light on how what the usufruct from the lands was, how it had been disposed of, and who benefited from the same. "

61. I have closely examined the records of the case and have considered the entire evidence and circumstances and I am clearly of the opinion that the courts below have recorded findings of fact on the basis of the assessment of the evidence and taking, into account the antecedent circumstances and have rightly come to the conclusion that the petitioner has failed to prove that the transfers alleged to have been made by the petitioner in favour of the transferees, detailed in Groups II and III writ petitions in this judgment, were in good faith and were for adequate consideration and were not Benami transactions.

62. No fault can be found in the judgments of the courts below and the findings recorded by them. No case has been made out on the part of the petitioner for issuing a writ of certiorari for quashing the aforesaid impugned orders as hardly any error apparent on the face of the record could be pointed out in the decisions of the courts below.

Point No. 6.

63. The petitioner claimed exemption of 13. 35 acres of land under Section 6 of the. The said section is being reproduced for convenient reference :

"6. Exemption of certain land from the imposition of Ceiling:- (1)

Notwithstanding anything contained in this Act, land falling in any of the categories mentioned below shall not be taken into consideration for the purposes of determining the ceiling area applicable to, and the surplus land of a tenure-holder, namely

(a) land used for an industrial purposes (that is to say, for purposes of manufacture, preservation, storage or processing of goods), and in respect of which a declaration under Section 143 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, subsists-

64. The petitioner has not raised any objection in the objections filed before the Prescribed Authority claiming such an exemption. This question has been raised for the first time before the Appellate Authority. The Appellate Authority has dealt with as Point No. 13 in its judgment. The Appellate Authority had summoned the original records in which the petitioner claimed that an area of 10. 90 acres of land in village Dohari Vakil and an area of 2. 54 acres of land in the same village have been declared to be a holding for industrial or residential purposes by the Sub-Divisional Officer. On examining the original files, the Appellate Authority found that the original record of the cases is missing. The Sub-Divisional Officer recorded a finding that on the basis of the secondary evidence, he is satisfied that the disputed land has been declared to be non-agricultural land. This order had been passed by the Sub-Divisional Officer on 21-11-1987. The Appellate Authority has held that there is no evidence to support that on the date the was enforced i. e. , 8-6-1973, the land was declared to be a land for non-agricultural use. In the same connection, the Appellate Authority referred to and placed reliance on the Government Order, dated 29-8-1950 wherein it was mentioned that the lessee shall use the land granted to them for the purposes of cultivation etc. There was no mention for permitting the lessee to use the land for the purposes other than agriculture. Relying on a decision in Om Prakash Agrawal v. Addl. District Judge 1981 A. W. C. 775, the Appellate Authority recorded a finding that for attracting Section 6 (a) of the Act, two conditions need to be fulfilled. First, that the land is used for industrial purpose and second, there subsists in respect of such land a declaration under Section 143 of U. P. Act No. 1 of 1951 and concluded that in the present case there is no concrete evidence to prove the first condition and the second condition has also not been complied with. I have examined the aforesaid findings with reference to the record of the case and I am. satisfied that the petitioner has failed to prove by any cogent evidence that the aforesaid land was declared to be land for non-agriculture use under Section 143 of the U. P. Act No. 1 of 1951 before the enforcement of the. Likewise there was no evidence on record to establish that on the date of the enforcement of the, the aforesaid land was used for any purpose other than agriculture or horticulture.

65. All the points raised by the petitioner accordingly foil and the writ petition deserves to be dismissed.

GROUP 11 WRIT PETITIONS.

66. In this group of writ petitions, the petitioners are the transferees from M/s. Escorts Farms (Ramgarh) Ltd. , the petitioner in Civil Misc. Writ Petition No. 12024 of 1992. These transferees claimed that they are bona fide purchasers of the land transferred to them by M/s. Escorts Farms (Ramgarh) Ltd. and the Prescribed Authority as well as the Appellate Authority have committed error in holding that the land transferred to them was not a bona fide transaction.

67. The main argument for II Group of writ petitioners has also been led by Sri K. . M. Dayal and Sri P. C. Srivastava. Some of the points urged by them are over-lapping with the points urged on behalf of M/s. Escorts Farms. (Ramgarh) Ltd.

68. The counsel for the petitioners have submitted that there are special features in some of the cases and the transactions in their favour cannot be disregarded on the basis of a general observation made by the Prescribed Authority as well as the Appellate Authority for discarding the sale-deeds executed in their favour as sham transactions. These special features have been pointed out by the learned counsel for the petitioners in Writ Petition No. 4309-Smt. Anuradha Agarwal. v. State of U. P. and others, Writ Petition No. 4184 of 1992-Smt. Reetu Kapoor v. State of U. P. and others, Writ Petition No. 4167 of 1992- Smt. Santosh Bajaj v. State of U. P. and others, Writ Petition No. 4290 of 1992-Smt. Indra Mohan v. State of U. P. and others Writ Petition No. 4307 of 1992--Smt. Saroj Singhari v. State of U. P. and others, Writ Petition No. 4299 of 1992 Smt. Bimla Dhawan. v. State of U. P. and others, Writ Petition No. 4298 of 1992- Smt. Sudarshan Kumar v. State of U. P. and others, Writ Petition No. 4306 of 1992 -Smt. Padma Dhinodia v. State of U. P. and others, Writ Petition No. 4293 of 1992-Smt. Janak Sachdeva v. State of U. P. and others, Writ Petition No. 4311 of 1992-C. S. Sachdeva v. State of U. P. and others. Writ Petition No. 4175 of 1992- Madhukar Bajaj v. State of U. P. and others, Writ Petition No. 4179 of 1992-Smt. Sheila Satyanand v. State of U. P. and others, Writ Petition No. 4174 of 1992-Smf. Premi Talwai: v. State of U. P. and others, and Writ Petition No. 4166 of 1992-Smt. Ajit Mehta v. State of U. P. and others. Special features pointed out by the learned counsel for the petitioners in the aforesaid cases are that in all such cases, the petitioners appeared themselves in the witness box or through persons holding power of attorney on their behalf, who have stated on oath that they are in possession of the land so transferred in their favour right from year 1969. They are paying Panchayat tax. Receipts have been filed. No cross- examination has been done on behalf of the State Government. Most of the aforesaid petitioners are residents of the villages where the land is situate. These petitioners have proved the execution of oral lease in their favour, the payment made by them in lieu of the lease deeds executed. The possession of these petitioners are proved and payment of land revenue by these petitioners are proved. Mutation of the names of these petitioners has also been made in the revenue records. The submission of the learned counsel for the petitioners is that be tagging all matters together, the individual merit of the transfers has not been considered and both the Prescribed Authority as well as the Appellate Authority have dismissed their objections without looking into the merits of individual case on the basis of the pleadings and the evidence adduced on behalf of M/s. Escorts Farms (Ramgarh) Ltd. The submission is that neither the State Government has led any contrary evidence nor these persons were ever confronted with any suggestion on behalf of the State Government that they are not in possession of the land in dispute. The further contention of the petitioners counsel is that these petitioners has nothing to do with M/s. Escorts Farms (Ramgarh) Ltd. , and the partnerships entered into by these petitioners with other transferees was bona fide. The petitioners were responsible for the profit and losses of the partnership. There was nothing - on record to come to the conclusion that the partnership was a sham transaction. The counsel for the petitioners has also pointed out to the provisions of Section

5 (4) of the which accepts the concept of the partnership for the purposes of the. It is further contended that the petitioners are in no way related to Sri H. P. Nanda or Sri P. N. Mehta of M/s. Escorts Farms (Ramgarh) Ltd. , and by enforcement of Benami Transaction Prohibition Act, the concept of Benami transaction stands obliterated retrospectively as purchasers of a land are to be deemed to be the owners of the land.

69. I have given careful consideration of the aforesaid submissions but in view of a detailed discussion made by me while dealing with the questions involved in Civil Misc. Writ Petition No. 12024 of 1992 (Group I in the present matter), these submissions, in any way, do not alter the conclusions arrived at earlier in this judgment where I have given reasons for holding that M/s. Escorts Farms (Ramgarh) Ltd. , had no right to transfer the land either by lease or by sale and all such transfers were wholly illegal and were made only with an object of defeating the provisions of Ceiling law. In view of these findings recorded earlier in this judgment, this Group of writ petitions have to meet the same fate, which the leading case has met. The special features pointed out in these cases do no in any way alter the position and the conclusions arrived at in the leading case i. e. , Civil Misc. Writ Petition No. 12024 of 1992. I am of the opinion, that these writ petitions do not deserve to be dealt with separately and the discussions made in the leading case i. e. , Writ Petition No. 12024 of 1992 equally apply to these writ petitions also. For the reasons recorded in Civil Misc. Writ Petition No. 12024 of 1992-M/s. Escorts Farms (Ramgarh) Ltd. v. The Commissioner and others, these writ Petitions deserve to be dismissed.

GROUP III WRIT PETITIONS.

70. In the above Group of Writ Petitions, leading arguments have been made in Civil Misc. Writ Petition No. 2464 of 1992- Pitam Das v. State of U. P. and others.

71. Some facts are to be noticed in connection with these Group of Wirt Petitions.

72. Under the provisions of the, which was enforced in 1961, the proceedings were initiated against M/s. Escorts Farms (Ramgarh) Ltd. , for declaring the land involved in the present Group of writ petitions as surplus area. The Prescribed Authority in Ceiling Case No. 56 of 1962-63, vide its judgment dated 11- 8-1967, declared 93. 83 acres of land as surplus area and out of the total area for which the surplus land was to be determined, an area of 1,382,47 acres was exempted. In this exempted area, 250 acres of land was exempted from the ceiling area of petitioner of leading case on the ground that this land belongs to School of Farm Mechanisation which has a separate and independent entity other than the objector concerned. It was held that since the aforesaid Schools owns 250 acres of land as its own property, the

said land cannot be clubbed with the ceiling area of petitioner of the leading case. Aggrieved thereby, the State Government filed Appeals wherein the Appellate Authority did not disturb the finding of the Prescribed Authority exempting the aforesaid 250 acres of land on the ground that it belongs to School of Farm Mechanisation which is a separate and independent entity. These two orders have been filed with a Supplementary Affidavit as Annexures SA-1 and SA-2 in Civil Misc. Writ Petition No. 2466 of 1992- Anm Kumar and 5 others, v. State of U. P. and others and have been relered to by the petitioners counsel in Support of his submission On the basis of these two decisions of the authorities under the 18 transferees froming petitioners in Group III writ petitions, claim to have purchased the aforesaid 250 acres of land from M/s. Escorts Farms (Ramgarh) Ltd. , on various dates falling after 24-1-1971.

73. However, after enforcement of Amendement Act No. 18 of 1973 in U. P. Act No. 1 of 1961, which was enforced on 8-6-1973, fresh notice was issued to M/s. Escorts Farms (Ramgarh) Ltd. , under Section 10 (2) of thewherein the aforesaid 250 acres of land was also included in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd.

74. Out of the 18 transferees, 1. 4 of them filed objections before the Prescribed Authority contending therein that the aforesaid 250 acres of land which was exempted in the earlier proceedings, has wrongly been included in the ceiling area of M/s. Escrots Farms (Ramgarh) Ltd. The petitioners of Group III Writ Petitions claimed that they are bona fide purchasers of the aforesaid land as earlier proceedings became final and the same could not have been re-opened. The judgment in the earlier proceedings is to operate as res judicata between the parties. On the basis of the aforesaid submission, the petitioners submitted that in any case, they were bona fide purchasers of the land believing that the aforesaid 250 acres of land is an exempted land and is outside the purview of the ceiling area.

75. These petitioners also contended that they have nothing to do with the partnership formed by the transferees, referred to in respect of Group I and Group II writ petitions. All these petitioners have been independently cultivating the land in their own rights and in any case they are bona fide purchasers of the land. Their land cannot be included in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. The fourteen objectors, who filed objections before the Prescribed Authority, under Section 37 of thereads with Section 151, C. P. C. are detailed in the judgment of the Prescribed Authority. The Prescribed Authority while dealing with their objections considered the submissions of the learned District Government Counsel (Revenue) in respect of these 18 transfers and noticed that in view of the mutation having been made in the revenue records and in view of the statements made by these transfers that they are in possession, these transfers cannot be disputed and it was wrong to include the land of these 18 transferees in the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. Thereafter the Prescribed Authority in its judgment considered the case of these 18 transferees separately and noticed that in view of the fact that in the earlier. proceedings, 250 acres of land was exempted by the Prescribed Authority treating the said area as land of the School of Farm Mechanisation, vide its order dated 11-8-

1967 and in view of the finding recorded by the Prescribed Authority that M/s. Escorts Farms (Ramgarh) Ltd. , has ; no concern with the aforesaid land, the entire legal rights in respect of the said land now vest in the School of Farm Mechanisation. The Prescribed Authority also noticed that in their objections, the petitioners have also stated that the aforesaid 250 acres of land belongs to the Schools and Sri P. N. Mehta has also stated in his statement that 250 acres of land is of School of Farm Mechanisation and the tenure holder has got no concern with that. Considering the aforesaid submission further, the Prescribed Authority has held that in this connection, M/s. Escorts Farms (Ramgarh) Ltd. , has nof^given any details of payment of sale consideration of the aforesaid land in favour of the School. Even it is not clear, is there any written agreement between M/s. Escorts Farms (Ramgarh) Ltd. , and the Schools of Farm Mechanisation by which the School of Farm Mechanisation has transferred its rights in favour of M/s. Ramgarh Farms and Industries Ltd. , and thereafter concluded that treating this 250 acres of land of the property of School of Farm Mechanisation, separate proceedings should be initiated against the School of Farm Mechanisation, and held that notices under the should be separately issued in the name of School of Farm Mechanisation. So far as the objections of 14 transferees are concerned, the Prescribed Authority categorically held that these objections are kept pending and the same will be decided later on. In the concluding part of its judgment, the Prescribed Authority excluded the aforesaid 250 acres of land form ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. , treating it to be land of School of Farm Mechanisation and holding that there is no justification for including the aforesaid land as ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. , according to the Prescribed Authority "such an action will be contempt of the Appellate Authority and the earlier judgment will operate as res judicata between the parties. " The Prescribed Authority further directed that separate form should be prepared for 250 acres of land and the objections of these transferees will be considered separately.

76. The State Government did not prefer any appeal against the aforesaid part of judgment of the Prescribed Authority. Only the petitioner of Group I writ petition and petitioners of Group II writ petitions filed appeals against the judgment of the Prescribed Authority. The Appellate Authority while rejecting the appeals of the petitioner of Group I writ * petition and petitioners of Group II writ petition also dealt with these 18 transferees and held that after amendment of the, by Act No. 18 of 1973, the exemption for School of Farm Mechanisation is not available, and in view of Section 38-B of the Act, the findings of the earlier authorities will not operate as res judicata and recorded a conclusion that the Prescribed Authority was not justified in excluding 250 acres of land from the ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. The Appellate Authority has also considered in detail the transfers made in favour of these 18 transferees and held that all these transfers were not bona fide and were made only to evade the Ceiling law. The conclusions arrived at by the Appellate Authority on the aforesaid point are being reproduced for convenient reference.

, ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . There are overwhelming reasons to conclude that the said transfer of land to the "school of Farm Mechanisation" is as questionable as any of the other transfers, which have already been determined to be not in good faith and designed to evade the provisions of the Ceiling Act.

Incidentally, it may also be mentioned that at no stage in the proceedings, either in this Court or earlier, have the appellants M/s. Escorts Farms (Ramgarh) Ltd. , adduced any evidence to prove that such a School really exists and is an independent entity^

95. The learned Prescribed Authority has himself expressed clear doubts over whether the transfers made in the name of the "school of Farm Mechanisation" were genuine. But he has declared this approximately 250 acres of land as surplus merely because an Appellate Court had earlier exempted this land from being covered by the Ceiling Provisions. It was argued in this court by the D. G. C. (Revenue) that Section 6 of the Ceiling Act does not provide for exemption for land under any purpose such as "school of Farm Mechanisation". It was also argued that Section 38-B of the Ceiling Act stipulates a bar against res judicata.

96. There is weight in the arguments put forth on behalf of the State. The learned Prescribed Authority was in no way hampered by the principle of res judicata. For the reasons enumerated in the paragraphs 91 to 95 above, it is concluded that the transfer of land for the "school of Farm Mechanisation" was not a bona fide transfer, and was in fact intended to evade the provisions of the Ceiling Act. "

77. Learned Senior Advocate, appearing for the petitioner, Sri R. C. Srivastava has mainly contended that the State Government having acquiesced to the order of the Prescribed Authority excluding 250 acres of land as ceiling area of M/s. Escorts Farms (Ramgarh) Ltd. , and the State Government having not filed any appeal against the order of the Prescribed Authority, the Appellate Authority had no jurisdiction to reverse the said finding. The counsel of these petitioners have also submitted that all these 18 transferees on whose objections it was held that 250 acres of land cannot be included in the ceiling area of M/s. Escrots Farms (Ramgarh) Ltd. , were not even parties before the Appellate Authority and as such the judgment given in their favour could not have been set aside by the Appellate Authority without hearing them. The learned counsel for the petitioners has placed reliance in the case of Chaudhary Sahu (Dead) by Lrs. v. State of Bihar AIR 1982 S. C. 98 and contended that in similar circumstances, the Honble Supreme Court has held that if the State Government did not prefer an appeal against the order of the Prescribed Authority, it was not open to the Appellate Authority the reverse the said finding on the appeal filed by to tenure-holder.

78. The learned Addl. Advocate General in reply to the aforesaid submissions has submitted that so far as the petitioner in Group III Writ Petitions are concerned, their writ petitions are misconceived as their objections were not decided even by the Prescribed Authority and the matter was pending in consideration. The learned Addl. Advocate General has contended that these petitioners cannot agitate the cause of M/sx Escorts Farms (Ramgarh) Ltd. , to the extent of 250 acres of land is concerned. On

merits of the decision of the Prescribed Authority, the learned Advocate General submitted that Section 38-B of thetakes care of the finality of the earlier proceedings and the Prescribed Authority erroneously took a view that the earlier proceedings have become final. He has also submitted that in the earlier proceedings it was held that School of Farm Mechanisation is a distinct entity. The very fact that all these 18 transfers have been made by M/s. Escort Farms (Ramgarh) Ltd. , itself shows that these transfers are not bone fide. If the School of Farm Mechanisation was a distinct entity as held in the earlier proceedings, M/s. escorts Farms (Ramgarh) Ltd. , has no authority to transfer these land in favour of the petitioners of Group III writ petitions.

80. Learned Addl. Advocate General has further submitted that if the exemption is treated to be an exemption permissible under the after enforcement of U. P. Amendment Act No. 18 of 1973j then such transfers are void ab initio and such land is to be trea-ted as surplus land in view of the provisions of Section 6 (2) and (3) of theas inserted by U. P. Act No. 20 of 1976 retrospectively. In case the exemption is excluded after the amendment in the by U. P. Act No. 18 of 1973, then it was open to the Prescribed Authority to re-open the issue of exemption granted under the earlier Act since no such exemption is permissible under the amended Act and the Prescribed Authority was justified in re- opening the issue regarding grant of exemption for 250 acres of land. The learned Addl. Advocate General has further submitted that the very fact that even the land which was got exempted in the name of School of Farm Mechanisation by pleading that it is a different entity, was also transferred by M/s. Escorts Farms (Ramgarh) Ltd. , belied the exemption theory and shows the mala fide of M/s. Escorts Farms (Ramgarh) Ltd. In this back ground the transfers made by them cannot be held to be bona fide. The learned Advocate General has pointed out that all 18 transfers have been made after the prescribed date i. e. , 24-1-1971 and a heavy burden lay on the objectors to prove their bona fides. In this context, he has also placed reliance on Order XLI, Rule 33 of the Code of Civil Procedure wherein it is provided that the Appellate Court is competent to grant relief in fvaour of a party, who has not appealed and has submitted to that, even though the State Government did not prefer an appeal, the Appellate Authority was competent to grant relief in favour of the State Government upsetting the erroneous findings of the Prescribed Authority regarding 250 acres of land.

80. Lastly it has been submitted that even assuming that the judgment of the Appellate Authority can be assailed on the technical ground that the State Government has not preferred appeal, this court is not obliged to quash even an illegal order, if by quashing such an illegal order, another illegal order is restored. This Court in. its discretionary jurisdiction should refuse to quash the order of the Appellate Authority as quashing the order of the Appellate Authority will result in restoring an order of the Prescribed Authority which is illegal on the face of the record.

81. I have given a careful consideration of the submissions of the learned counsel for the parties. Before considering the objection of the petitioners, counsel that the State Government did not prefer appeal

against the order of the Prescribed Authority and as such the Appellate Authority could not have reversed the finding in respect of 250 acres of land, exempted in the earlier proceedings, it is necessary to examine the merits of the decision of the Appellate Authority.

82. Section 38-B of the. Act is reproduced as under

"38-B. Bar against res judicata.-No finding or decision given before the commencement of. this section in any proceeding or on any issue (including any order, decree or judgment) by any court, Tribunal Or authority in respect of any matter governed by this Act, shall bar the retrial of such proceeding or issue under this Act, in accordance with the provisions of this Act as amended from time to time. "

83. Section 5 (1) of thehas also been reproduced earlier in this judgment. Section 5 (1) as amended by U. P. Act No. 18 of 1973 contemplates that no tenure-holder shall be entitled to hold in the aggregate throughout Uttar Pradesh, any land in excess of the ceiling area applicable to him.

84. Section 9 of thecontemplates that after the enforcement of Act No. 18 of 1973, the Prescribed Authority shall, by general notice, published in the official Gazette, call upon every tenure-holder holding land in excess of the ceiling area applicable to him to submit a statement in respect of all his holdings in such form and giving such particulars as may be prescribed.

85. Section 10 of thecontemplates serving of the notice by the Prescribed Authority in case the tenure holders fails to submit the return under Section 9. The entire scheme of the as amended by U. P. Act No. 18 of 1973 is that all exemptions covered by the earlier Act stands obliterated and only the exemptions which were permitted under the after the U. P. Act No. 18 of 1973 were to be taken care of, and earlier exempted land was to be included in the ceiling area of the tenure-holder. After U. P. Act No. 18 of 1973, Section 6 of theproviding for exemptions of land from the ceiling area was drastically changed. In amended Section 6 of the. No exemption is contemplated for School of Farm Mechanisation. This exemption could have been permitted only under the unamended Act, Section 6 (six) which permitted exemption for "land held for the purposes of an educational institution by a society- registered under the Societies Registration Act, 1860, (Act XXI of 1860), or by any body corporate. " In strict sense exemption was not attracted even under the old Act on the ground that M/s. Escorts Farms (Ramgarh) Ltd. , was running a School of Farm Mechanisation. In fact a reading of the judgment of the Prescribed Authority, dated 11-8-1967 in Case No. 56 of 1962-63 decided under the provisions of the unamended Act clearly shows that the Prescribed Authority did not exempt the land under Section 6 (1) of the unamended Act, on the other hand held that 250 acres of land belonged to

School of Farm Mechanisation which is a separate entity. The petitioner of the leading case itself by selling the land to petitioners of Group III writ petitions after 24th of January, 1971 amply demonstrate that separate entity of School of Farm Mechanisation, if any, later on ceased to exist as the petitioner of the leading case itself was exercising proprietory rights over the land. The earlier judgment of the Prescribed Authority lost its relevance since the entity of School of Farm Mechanisation merged into entity of petitioner of the leading case. The hard fact that the petitioner of the leading case has sold out 250 acres of land carved out for School of Farm Mechanisation in the earlier judgment, clinches the issue that the entity of the School of Farm Mechanisation ceased to exist and the said land came under the control of the petitioner of the leading case and in fact the petitioner of the leading case was exercising its rights over the said land as the owner thereof which of course it was not. However, the sale deeds executed by the petitioner in the leading case in favour of the petitioners of Group III Writ Petitions amply demonstrate that the petitioner of the leading case was in possession of 250 acres of land even after 24-1-1971 and entity of School of Farm Mechanisation, if any ceased to exist.

86. In the aforesaid background, the question for consideration is whether the earlier judgment of she Prescribed Authority, dated 11-8-1967 operated as res judicata

87. Section 38-B of tin Act as quoted above mandates that no, finding or decision given before the commencement of this section in any proceedings or on any issue by any court, Tribunal, Authority etc. , shall not be barred by the principles of res judicata.

88. In Ram Lai v. State of U. P. and others 1978 A. L. J. 1197, this Court while construing the scope of Section 38-B of the Act, held as under:-

"this provision to our mind was introduced to achieve the object of the various amendments introduced in the principal Act and to give effect to them. Section 38-B. in our view, contemplates that if by the amendments made in the principal Act certain findings or decisions had become contrary to Law, these findings or decisions could be reopened and the principle of res judicata would not bar a retrial of those issues in accordance with the provisions of the principal Act as amended. This provision, in our opinion, did not authorise the Ceiling Authorities to ignore the decisions rendered or decrees passed by competent courts, Tribunals or authorities in respect of matters which were not affected by the changes made in the principal Act

89. In the facts of the present case, it is clear that in the change circumstances, where the entity of the School of Farm Mechanisation ceased to exist, the land carved out for School of Farm Mechanisation

merged into the land of the petitioner for all practical purposes. The question for consideration is as to whether under the amended Act, the aforesaid land could have been treated as a part of the land of the petitioner of leading case for purposes of determining ceiling area, is to be understood in the light of Section 9 of the U. P. Imposition of Ceiling on Land Holdings (Amendment) Act, 1975 (U. P. Act No. 2 of 1975). For ready reference,

Section 9 of the aforesaid Act is quoted as below :

"9. Transitory provision.-Where an order determining the surplus land in relation to a tenure-holder has been made under the principal Act, before the commencement of this Act, the prescribed authority may, at any time within a period of two years from the commencement of this Act, re-determine the surplus land in accordance with the principal Act as amended by this Act. "

90. In Kedar Singh v. Additional District Judge, Varanasi and others 1980 A. L. J. 36, a Division Bench of this Court while considering the scope of Section 38-B, held :-

"in Writ Petition No. 3073 of 1977 Krishna Kumar v. State of U. P decided today, it has been held that Section 38-B which was introduced in the Ceiling Act by Amending Act No. 20 of 1976, which came into force on 10th October, 1975 applies only where retrial is necessitated by reason of the amendments introduced by the aforesaid Amending Act becoming applicable. If in a case any provision introduced by the aforesaid Amending Act is applicable, a previous decision or finding will not bar retrial of such an issue or proceeding. . . . . . . . . . . . . . . . . . . . . . . . . "

91. In view of these decisions, I am clearly of the view that the Prescribed Authority had committed a patent error of law in holding that the earlier judgment of the Prescribed Authority, dated 11-8-1967 operated as res judicata between the parties. In the changed circumstances, the earlier judgment of the Prescribed Authority, dated 11-8-1967 became otiose.

92. The Appellate Authority has rightly set aside the aforesaid finding of the Prescribed Authority.

93. However, two questions still arise for consideration of the present matter for adjudging the correctness of the judgment of the Appellate Authority impugned in these matters. Firstly, since the petitioners of Group III Writ Petitions were not parties in the appeals pending before the Appellate

Authority, whether the judgment passed by the Appellate Authority affecting their rights cannot be sustained as the said judgment was passed patently in violation of at least the principles of natural justice, as the petitioners of Group II writ Petitions had no opportunity to place their point of view before the Appellate Authority, and the ancillary question which requires consideration in the present matter is, can such a judgment of the Appellate Authority, be sustained only on the ground that the judgment is correct in law.

94. So far as the principles of natural justice are concerned, the petitioners of Group III writ petitions were heard on the merits of their case also in this court, and in view of the findings recorded in leading case, it is established that the land involved in the present matter was covered by provisions of the Government Grants Act and the petitioner of the leading case had no authority to sell out the aforesaid land, as such the selling out of the aforesaid land after 24-1-1971 cannot be held to be bona fide nor the petitioner in the leading case has been able to establish it. The discussion of the judgment in the earlier part amply shows that the transfer of the aforesaid land by the petitioner of the leading case cannot be held to be bona fide. So for as the transferees are concerned, it is open to them to sue for the damages which they had to suffer due to the conduct of the petitioner of the leading case in accordance with law. I am not expressing any opinion on the question as to whether they were bona finds purchasers of the land in question only to the extent of their rights to claim damages against the petitioner of the leading case. I have already held that the transfers made by the petitioner of the leading case was not bona fide and under the provisions of the, the land so transferred in favour of the petitioners of Group III writ petitions has been rightly treated to be the land of the petitioner of the leading case for determing the ceiling area.

95. In Managing Director, ECTL, Hyderabad v. B. Kanmakar JT 1993 (6 [LQ/SC/1993/897] ) S. C. 1, the Honble Supreme Court has construed the principles of natural justice as under :-

"the theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. The are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an "unnatural expansion of natural justice" which in itself is antithetical to justice. "

96. In view of the aforesaid decision, the judgment of the Appellate Authority cannot be upset only for violation of the principles of natural justice of the petitioners of Group III Writ Petitions as I have myself considered their submissions on merits and I am clearly of the view that no useful purpose is to be achieved by observing the ritual of sending these casts for re-consideration after hearing the petitioners of Group III Writ Petitions.

97. There is another aspect of the matter. Even assuming that the judgment of the Appellate Authority suffered from the vice of violating the principles of natural justice, if the judgment of the Appellate Authority is set aside, it will revive the judgment of the Prescribed Authority holding that the earlier judgment of the Prescribed Authority, dated 11-8-1967 in Case No. 56 of 1962-63 under the principal Act bars retrial of issue of exemption of 250 acres of land for School of Farm Mechanisation. As I have held that the Prescribed Authority was clearly in error in taking a view that the earlier judgment, dated 11-8-1967 of the Prescribed Authority operated as res judicata in the subsequent proceedings, the setting aside of the judgment of the Appellate Authority will result in revival of an illegal judgment of the Prescribed Authority, dated 29-6-1991.

98. This is settled principle of law that discretionary remedy of issuing certiorari will be refused where the effect of quashing the impugned order would be to restore an illegal order. In this context reference may be made to the case of Gadde Venkateswara Rao. v. Government of Andhra Pradesh and other A. I. R. 1966 Supreme- Court 828, paragraph, 171. In this view of the matter, I am not inclined to interfere with the order of the Appellate Authority at the instance of the petitioner of Group III Writ Petitions so far as it concerns.

99. The further question which requires consideration is that in view of the decision of the Honble Supreme Court in Chaudhary Sahus ease {supra), whether the Appellate Authority was justified in upsetting the decision of the Prescribed Authority without the State Government having filed an appeal in the matter. It is not disputed in the present case that the State Government neither filed any appeal nor any cross-objection. In the aforesaid case, the appellant in the appeal was a land holder in terms of the Bihar Land Reforms (Fixation of Ceiling Area and Acquisition of Surplus Land) Act, 1961 and the Additional Collector, after considering the objection of the tenure-holder ordered allotment of twelve units to the petitioner. The petitioner feeling aggrieved went up in appeal before the Commissioner of the Division. The State of Bihar submitted to the order and did not go up in appeal. The appeal was heard and a final order was passed by the Commissioner, who allowed the appeal and set aside the order of the Addl. Collector and remanded the case to him for disposal. The Commissioner set aside the order of the Addl. Collector in its entirety even on the points on which the Addl. Collector had decided the objection of the petitioner in his favour. The tenure-holder filed a writ petition under Article 226 of the Constitution of India chellenging the order of the Commissioner. The High Court dismissed the writ petition and confirmed the order of the Commissioner on the basis of the provisions of Order XLI, Rule

22 of the Code of Civil Procedure. The tenure-holder went up in appeal before the Honble Supreme Court wherein the Honble Supreme Court held that Order XLI, Rule 22 of the Code of Civil Procedure was not attracted as the State Government has not filed any cross-objection against the judgment of the Collector.

100. The State of Bihar placed reliance on Order XLI, Rule 33, C. P. C. The Honble Supreme Court held that in the circumstances of the case, the provisions of Order XLI, Rule 33, C. P. C. were not attracted.

The relevant portion of the Honble Supreme Court-s judgment is reproduced below

"the object of this rule is to avoid contradictory and inconsistent decisions on the same questions in the same suit. As the power under this rule is in derogation of the general principle that a party cannot avoid a decree against him without filing an appeal or cross-objection, it must be exercised with care and caution. The rule does not confer an unrestricted right to re-open decrees which have become final merely because the appellate Court does not agree with the opinion of the Court appealed from.

Ordinarily, the power conferred by this rule will be confined to those cases where as a result of interference in favour of the appellant further interference with the decree of the lower court is rendered necessary in order to adjust the rights of the parties according to justice, equity and good conscience. While exdrcising the power under this rule the Court should not lose sight of the other provisions of the Code itself nor the provisions of other laws, viz. , the law of Limitation or the Law of Court-Fees etc. "

101. In the aforesaid decision, the Honble Supreme Court itself held that ordinarily the power conferred by Order XLI, Rule 33, C. P. C. should be confined to those cases where it is necessary to adjust the rights of the parties according to justice, equity and good conscience. In the aforesaid decision, the Honble Supreme Court has only held that the power under Order XLI, Rule 33 should be exercised with due care and caution and in exceptional circumstances. For convenience, Order XLI Rule 33 of the Code of Civil Procedure is re-produced below:-

33. Power of Court of Appeal-The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or

parties, although such respondents or parties may not have filed any appeal or objection and may where there have been decrees in cross-suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees :

Provided that the Appellate Court shall not make any order under Section 35-A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order. "

102. Under the aforesaid provision, the Appellate Court has been conferred wide powers to pass orders which ought to have been passed irrespective of the fact whether any party before it has appealed against the impugned judgment or not. In the light of the decision of the Honble Supreme Court in the case of Chaudhaiy Sahu (supra), the only question which requires consideration is as to whether in the present set of facts, the Appellate Court was justified in exercising its powers under Order XLI, Rule 33, C. P. C. for adjusting the rights of the parties according to justice, equity and good conscience. The facts stated above, clearly demonstrate that the Prescribed Authority was labouring under a mis- apprehension that the earlier findings recorded by the Prescribed Authority operated as res judicata ajid was further under a wrong impression that the issue of grant of exemption to School of Farm Mechanisation cannot be re-opened. Both the assumptions of the Prescribed Authority were in ignorance of the statutory provisions of law. It was necessary for adjusting the rights of the parties, which included the State Government also, that the aforesaid illegal order of the Prescribed Authority should have been set at rest. In the present case, the exceptional circumstances for applying the rule are squarely attracted and no fault can be found in the judgment of the Appellate Authority on the said count. Besides it, I am also satisfied that if on this technical ground, the judgment of the Appellate Authority is set aside, it will result in restoring the judgment of the Prescribed Authority exempting, 250 acres of land from the petitioner ceiling area which is patently an illegal order. [air 1966 SC 828 [LQ/SC/1965/259] (para 17) (supra)]. Assuming for arguments sake that there was some legal flaw in the order of the Appellate Authority, while exercising its jurisdiction in reference to the provisions of Order XLI, Rule 33, C. P. C. , this Court is not inclined to interfere with the aforesaid order on this technical plea since the quashing of the aforesaid order is to result in restoring the order of the Prescribed Authority which itself was contrary to the provisions of Act No. 18 of 1973 which was enacted by the Legislature for advancing the objects of the Constitution contemplated in the Directive Principles of the Constitution with particular reference to Article 39 (b) (c) of the Constitution of India.

103. All the writ petitions fail and are dismissed with costs and interim orders passed in all the petitions are vacated forthwith.

104. The question which calls for further direction of this Court is as to what appropriate cost should be imposed on the petitioners in the present matter. The narration of facts shows that merely, the petitioner of leading case have been dragging on the proceedings and had been filing writ petitions on flimsy grounds and thereby creating a situation that the proceedings initiated sometime in the year 1974 could be concluded by the Prescribed. Authority only on 29-7-1991 and thereby they enjoyed the fruits of the excess land for 17 years before the land was declared as surplus area by the Prescribed Authority. Likewise from 29-7-1991 till the delivery of the judgment, the petitioners have again enjoyed the furits of the excess area by obtaining interim orders from the Court of Commissioner as well as from this Court.

105. Section 16 of thereads as under :

"16. Damages for use and occupation of surplus land.-Where any tenure-holder holds any land on or after, the commencement of the Uttar Pradesh Imposition of Ceiling on Land Holdings (Amendment) Act, 1972, in excess of the ceiling area applicable to him, he shall be liable to pay to the State Government for the period commencing from the first day of July, 1973 until the date on which the Collector takes possession of surplus land under Section 14, or the date on which the tenure-holder voluntarily delivers possession to the Collector under (the said sub-section) whichever is earlier, such compensation for use and occupation as may be prescribed. "

106. Rule 18-A of the Rules framed under the is as under :-

"18-A. The amount of damages for use and occupation referred to in Rule 18 shall, subject to the provisions of sub-rule (2) thereof, be determined in accordance with the following principles :

(a) Except as provided in" clause (d), damages shall be ascertained in respect of each crop (Kharif and Rabi) separately.

(b) For the first five crops commencing from the Kharif of 1380 Fasli, damages for each crop shall be equal to the annual land revenue calculated at sanctioned hereditary rates applicable to the land concerned.

(c) For the remaining crops commencing from Rabi of 1382 Fasli, damages for each crop shall be equal to 6-1/4 times of the annual land revenue calculated at the sanctioned hereditary rates applicable to the land concerned.

(d) In respect of grove-land, damages for each Fasli year shall be equal to 5 times of the annual land revenue calculated at the sanctioned hereditary rates applicable to the land concerned.

(e) Damages shall not exceed the amount payable to the tenure-holder concerned under Chapter III of the if the possession of the land in respect whereof such amount is payable was taken under Section 14 (8) before October 10, 1975.

(f) The aggregate damages in respect of the crops grown during the first five crops referred to in clause (b) shall not exceed the amount payable to the tenure-holder concerned under Chapter III of the. "

107. The aforesaid two provisions provide a procedure for calculating the compensation which a tenure is required to pay in a circumstance where the possession of the land is take by the Collector before 10th of October, 1975. The aforesaid rule does not taken into consideration a situation where a tenure holder by his menoeuring and the prolonged litigation enjoyed the fruits of surplus land for as long as almost 23 years after the date of the commencement of the Amending Act i. e. , U. P. Act No. 18 of 1973 which came into force on 8th of June, 1973.

108. Some statistics regarding the income from cultivation in respect of the area where the land involved in these cases was situate, is necessary for determing the appropriate cost to be imposed on the petitioner of the leading case in the present case.

109. In Statistics published by the Government of Uttar Pradesh for the year 1989-90 by Director of Agriculture, Statistics and Insurance of Crops, U. P. Krishi Bhawan, Lucknow in July, 1992, show that in the relevant year, the average crop of paddy in the Nainital district yielded an average of 29. 70 guintals per hectare (page 28 of the Booklet). The price of the aforesaid commodity has been shown in the aforesaid statistics to Rs. 362. 08 per quintal (Page 143 of the Booklet), The net income per hectare, according to the aforesaid statistics, comes to more than Rs. 10,750 per hectare (hectare is equivalent to 2. 5 acres) and the net income calculated per acre for paddy crop for one crop comes to roughly Rs. 4000 or more. Likewise, for crop of wheat, the average yield in the Nainital district for an irrigated land comes to 20. 41 quintals per hectare. The price of the wheat in the relevant year was 216. 85 per quintal. The

average income per hectare in this way comes to Rs. 4,423. 74 meaning thereby it comes to roughly Rs. 1629 per acre for wheat crop. All the revenue records available on record show that the area was irrigated area and a double crops area and the crops mentioned in the relevant Khasra entries are crops of paddy, wheat, oil seeds cane, soyabeen etc. All other f crops namely, oil seed, cane and soyabeen are of higher yield, and high income in derived from them. The exact calculation of the fruits enjoyed by the petitioner of the leading case, in the present. matter, cannot be calculated due to the limitations of the Court itself. However, for ready and rough calculation, it is clear the roughly the petitioner of the leading case was enjoying the fruits of the income of the crops of the aforesaid land at the rate of Rs. 6,000 per acre. Even if the period for which the petitioner of leading case successfully avoided the declaration of surphis land upto the stage of the Prescribed Authority is excluded i. e. , the date on which the Prescribed Authority delivered its judgment on 29-7-1991, is excluded, the petitioner of the leading case has further enjoyed the fruits of the interim orders passed by the Appellate Authority or passed by this Court, for which the petitioner of the leading case should compensate the State Government, as the petitioner of the leading case had enjoyed the fruits of the crops of the surplus land on the basis of the interim orders passed by the Appellate Authority as well as by this Court. The Prescribed Authority, vide its judgment, dated 29-7-1971 declared an area of 878. 67 acres of land in terms of the irrigated land as surplus area of the petitioner of the leading case. If 878. 67 acres of land is multiplied by Rs. 6,000, it comes to more than of Rs. 52,68,000, so in one year the petitioner has enjoyed the fruits of the" surplus land on the basis of the interim orders to the tune of more than Rs. 52,00,000. If this is further multiplied by 31/2 years during which the interim orders continued in favour of the petitioner of the leading case, it will come to nearly 2 crores of rupees. All Courts have power to adjust equities at the stage of final decision of the case and compensate appropriately the party who has been deprived of his right to use the property and impose damage on the party, who had enjoyed the fruits of the property by obtaining interim orders from the courts and delaying decision in the matter by adopting other dilatory tactics. This Court in exercise of its jurisdiction under Article 226 of the Constitution of India has all the power to decide imposition of cost keeping in regard the facts and circumstances of the case. In Naresh Shridhar Mirajkar v. State of Maharashtra AIR 1967 SC 1, it has been held :-

"the High Courts in India are superior courts of record. They have original and appellate jurisdiction, They have inherent and plenary powers. Unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of this Court, the High Courts, have unlimited jurisdiction, including the jurisdiction to determine their own powers. "

110. As far back as in the year 1869, the State Legislature passed U. P. Act No. XIII of 1869-Procedure of High Court Act, 1869. Section 3 of the aforesaid Act is as under

"3. Power to award costs on petitions, etc.-Whenever any petition, application or motion is made in any matter coming before the said Court in the exercise of its civil or other jurisdiction, the Court shall have power to award and apportion costs in any manner it may think fit. "

111. Keeping in regard to all the circumstances, I impose a cost of Rs. 10,00,000/- (Ten lacs) on M/s. Escorts Farms (Ramgarh) Limited (petitioner of the leading writ petition) which M/s. Escorts Farms (Ramgarh) Limited will deposit in the Court, within a month from to day. In case of default, the State Government will recover the aforesaid amount as cost from the petitioner of the leading case or its Managing Director Sri. P. N. Mehta, who enjoyed the fruits of the surplus land on the basis of the interim orders, on the basis of this judgment, no formal decree will be required to be prepared. The judgment will be executed without preparation of any final decree by issuing a recovery certificate by the Registrar of the Court. This special procedure is being adopted in exercise of inherent powers under Article 226 of the Constitution of India.

112. Petitioners of Group II and III writ petitions will not be burdened with any cost.

113. The State Government is further directed that in compliance of this judgment, the possession of the land declared surplus by the Appellate Authority should be taken from all persons, who are found in possession of the aforesaid land irrespective of any transfer etc. , made by the petitioner of the leading case or their transferees. It is further directed that the land should be settled as far as possible within three months of the taking of possession of the land in accordance with the provisions of the as contemplated by Chapter IV thereof. The cost imposed on the petitioner of the leading case will be utilised for rehabilitation and setting the persons in order of preference mentioned under sub-section (1) read with sub-section (3) of Section 198 of the U. P. Zamindari Abolition and Land Reforms Act, 1950 and also as contemplated under Section 27 (3) of the U. P. Imposition of Ceiling on Land Holdings Act. However, it is being made clear that in addition to the costs imposed above, it will be open to the State Government to recover damages from the petitioner of the leading writ petition for wrongful enjoyment of the fruits of the excess area as permissible under law from the date of enforcement of U. P. Act No. 18 of 1973 till the delivery of judgment by the Prescribed Authority in accordance with Section 16 of the. The costs imposed in the present petitions have only taken into consideration the wrongful enjoyment of excess land after decision of the Prescribed Authority.

114. Let a copy of this judgment be placed on the record of each writ petition.

115. The Registrar of the Court is directed to forward a copy of this judgment to the Chief Secretary Government of Uttar Pradesh, Lucknow for necessary compliance. The Registrar of the Court is also directed to entrust back the original record to Shri Rakesh Dwivedi, the then Additional Advocate General for ensuring that record reaches back to the Commissioner, Kumaun Division and kept in safe custody till this order is executed.

Petition dismissed.