Holding

The State Legislature may amend the pre‑constitutional Grants Act, the Validation Act validates prior notifications, and the conversion of leasehold to hereditary tenancy is a modification, not an acquisition, so no compensation is payable under Article 31A.

Summary

The appellant, Kanwar Lal, succeeded to a 1920 lease of 4,805 acres granted under the Government Grants Act, 1895, which was later taken over by the Uttar Pradesh Government Estates Thekedari Abolition Act, 1958. The State amended the Grants Act and later enacted the Validation Act, 1970 to revive the earlier notifications. The Supreme Court held that under Article 372 and Entry 18 of List II the State Legislature could amend the pre‑constitutional Grants Act, and that Section 6 of the Validation Act validated the earlier notifications, so fresh notifications were unnecessary. It further held that converting the leasehold into a hereditary tenancy was a modification of rights, not an acquisition within the meaning of the second proviso of Article 31A, and therefore no compensation was payable. Finally, the Court ruled that Section 133A of the U.P. Zamindari Abolition and Land Reforms Act, 1950 could not override the non‑obstante clause in Section 3 of the amended Principal Act. The appeal was dismissed with costs.

Issues considered

The State Legislature's competence to amend the pre‑constitutional Government Grants Act, 1895 under Article 372 and List II.
Whether fresh notifications were required after the Validation Act to revive the earlier notifications.
Whether the Validation Act violates the second proviso of Article 31A(1) requiring compensation for acquisition of land under personal cultivation within ceiling limits.
Whether the conversion of leasehold rights into hereditary tenancy amounts to acquisition within the meaning of Article 31A, thus entitling the appellant to compensation.
Whether Section 133A of the U.P. Zamindari Abolition and Land Reforms Act, 1950 excludes the land from the provisions of the Principal Act.
Whether the non‑obstante clause in Section 3 of the amended Principal Act overrides Section 133A.

Legislation cited

Subjects

land reformleaseholdhereditary tenancyacquisitioncompensationArticle 31Avalidation actstate legislature competencenotificationsnon-obstante clause

Judgment

A KANWARLAL
v.
!IND ADDITIONAL DISTI. JUDGE, NAINITAL AND ORS.

APRIL 20, 1995

B [P.B. SAWANT AND S.C. AGRAWAL, JJ.]

Constitution of India, 1950: Articles 31A, 246(3) and 372 Pre-Constitu- ' '
tional central statute-Amendment of-State Legislature-Competent-Ac-
quisition of Land--Under personal cultivation-Within ceiling limit-Entitled
C to compensation-Only modification or restriction of rights in such land-Not
a case of acquisition-Not entitled to compensation.

U.P. Government Estates 1hekedari Abolition (Re-enactment and
Validation) Act, 1970.

D Taking over land-Notifications issued-Act amended-Whether fresh
<-
notifications required-Held: not necessary.

In 1920s, Government of India offered to extend many concessions
to those who agreed to develop the undeveloped lands. The predecessor of
E the appellant accepted the offer and agreed to develop land in District
Nainital. By lease deed Dated 25th August, 1920 Government of India
granted lease of 4805 acres of land to Lala Kushi Ram for development
under the Crown Grants Act (later renamed as Government Grants Act,
1895) for a period extending upto 31st March, 2013.

F The State of U.P. passed Government Estates Thekedari Abolition
Act, 1958 (for short "Principal Act") and notifications were issued under
the said Act vesting all leased lands in the State. The High Court quashed
these notifications as being ultra vires the Constitution. The U.P. Govern·
ment Estates Thekedari Abolition (Re-enactment and Validation) Act,
1970 (for short "the Validation Act") was passed whereby the notifications
G issued under the Principal Act were revived under the amended Principal
Act the State issued notifications applying the provisions of the U.P.
Zamindari Abolition and Land Reforms Act, 1950 ("the Z.A. Act") to the
villages in question. The appellant the successor to the original lessee
challenged these notifications before the High Court, but was not success·
H ful. Aggrieved by the High Court's judgment, the appellant preferred the
622
KANWAR !-AI, v. IIND ADDL. DISTI. JUDGE 623

present appeal. A
On behal( of the appellant it was contended that the State cannot
amend the Government Grants Act which is a pre-constitutional central
statute; that in the absence of a fresh notification issued under the
amended Principal Act, his leasehold rights cannot be deemed to have been
terminated; that the Validation Act is violative of the second proviso to B
Article 31A(l) of the Constitution, hence he is entitled to full compensa-
tion; and that in any case he has become Government lessee vide Sec. 133A
of the Z.A. Act and hence the land would stand excluded from the
provisions of the Principal Act.

Dismissing the appeal, this Court
c
HELD: 1. In view of the provisions both of clauses (1) and (3)(b) of
Articles 372 and 246(3) read with Entry 18 of List II of the Constitution,
the State Legislature was competent to amend the Government Grants Act,
1895. (628-B, CJ D
2.l. Sec. 6 of the U.P. Government Estates Thekedari Abolition
(Re-enactment and :validation) Act, 1970 ('Validation Act") validated any-
thing done or purported to have been done and any action taken or
purported to have been taken under the provisions of the U.P. Government
Estates Thekedari Abolition Act, 1958 ('Principal Act"). (628-F) E
2.2. In view of the said express validating provision, the notifications
which were issued under the Principal Act in terms revived with the revival
of the Principal Act and hence the action taken under the said notifications
also stood validated. It was not necessary to reissue the notifications after F
the enactment of the Validation Act as otherwise it would render the
provisions of Sec. 6 of the Validation Act otiose. (629-B, C]

Mahendra Lal Jaini v. The State of Uttar Pradesh and Others, (1963)
Supp. 1 SCR 9121, held inapplicable.
G
3.1. The second proviso to Article 31A (1) of the Constitution
prohibits acquisition by the State of any portion of the land under personal
cultivation which portion is within the ceiling limit, without payment of
market value as commensation. [630-F)

3.2. By virtue of the Principal Act as amended, what is conferred H
624 SUPREME COURT REPORTS (1995] 3 S.C.R.

A permanently on the erstwhile lessees under the Grants Act is the
hereditary tenancy. The Principal Act as amended by Itself does not
restrict the right of the hereditary tenant to transfer the land. The restric-
tion on the transfer by a hereditary tenant bas been placed by the U.P.
Tenancy Act, 1939 und not by the Principal Act as amended. [630-G]

B 3.3. Further under the old lease the appellant could bold the land upto
2013 whereas under the Principal Act the appellant can now bold such land
permanently. The confernment of the permanent hereditary tenancy on the
appellant is in no way inferior to the rights of the appellant under the old
grant. Hence in the first instance the question of compensation does not
C arise. Secondly, a mere restriction on the incidence of the lease or ownership
is not acquisition within the meaning of Article 31A. [630-H, 631-A, BJ

3.4. In the present case instead of having the full rights as a lessee
including the right to transfer the land, the appellant will be a hereditary
tenant without the right to transfer the land. To that extent the rights of
D the appellant are modified. It is not, therefore, a case of acquisition of bis
estate within the meaning of the second proviso to Article 31A (1). Hence
the appellant is not entitled to compensation as provided by the said ..
proviso. [631-H, 632-A]

3.5. The appellant is conferred with the rights as the hereditary
E . tenant 11ermanently in place of bis earlier rights as a tenure-lessee which
were to expire after 2013. This modification is more beneficial to the
appellant. On this account also the second. proviso to Article 31A(l)
requiring compensation to be paid does not come into play in the present
case. [632-B, CJ
F
4. Sec. 3 of the amended Principal Act starts with a non obstante
clause in view of which Sec.133A of the U.P. Zamindari Abolition and Land
Reforms Act, 1960 cannot have the effect of denying the State the power
under the said Sec. 3 to determine the lease. [633-B]

G CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4609 of
1995 Etc. Etc.

From the Judgment and Order dated 19.10.87 of the Allahabad High \
Court in C.M.W.P.No. 4549 of 1978.

H Satish Chan<lra and Bharat Sangal for the Appellant.
KANWARLALv. IINDADDL.DISTI.JUDGE[SAWANT,J.] 625

Dr. N.M. Ghatate, Ms. Rachna Gupta and AK. Srivastava for the A
Respondents.

The Judgment of the Court was delivered by

SAWANT, J, Leave granted.
B
These four appeals are directed against a common judgment dated
19th October, 1987 delivered by the High Court in fonr writ petitions filed
before it by the four appellants. Since the questions of law which arise in
these appeals are common, it would be sufficient to refer to the facts in
one of the appeals, viz., Civil Appeal arising out of S.L.P. No. 3204 of 1988 C
since the High Court has taken the facts from it.

2. In 1920s, Government of India being anxious to develop the
undeveloped lands throughout the country including that in the district of
Nainital offered to extend many concessions to those who agreed to
develop the land. Lala Khushi Ram Dusaj, predecessor of the appellant D
was one of the persons who accepted the offer and agreed to develop land
in District Nainital, Government of India granted lease of 4805 acres of
land to Lala Khushi Ram for development under the Crown Grants Act
(later renamed as Government Grants Act, 1895 - hereinafter referred to
as "the Grants Act") by a registered lease deed dated 25.8.1920 which was E
executed by the Secretary of State for India in Council for a period
extending upto 31st March, 2013. One of the conditions of the said lease
with which we are concerned here, was that the leased land would not be
taken away except as specified by the clauses of the lease deed and that
too for the purpose of land reforms. In case the land was taken away,
compensation was payable to the lessee in accordance with the provisions F
of the Land Acquisition Act, 1894. Section 3 of the Grants Act provided
that all provisions, restrictions, conditions ·and limitations contained in any
such grant or transfer shall be valid and take effect according to their tenor,
any rule of law, statute or enactment of the legislature· to the contrary
notwithstanding. After taking possession of the leased land, the lessee Lala G
Khushi Ram is alleged to have spent moneys to clear the jungle and !eve,
the uneven terrain and develop the land for agriculture.

-../ In the year 1959, the State of U.P. passed U.P. Government Estates
' Thekedari Abolition Act, 1958 (hereinafter referred to as the "Principal
Act"] and issued notifications under the said Act for taking over the leased H
626 SUPREMECOURTREPORTS [1995] 3 S.C.R.

A lands granted under the Grants Act and issued notifications vesting all such
lands in the State. In 1960, the State of U .P. amended the Grants Act.
While retaining the provisions of Section 3 of the said Act the Amendment
added a proviso to the said section which stated that nothing in the said
section shall prevent, or be deemed ever to have prevented, the effect of
B any enactment relating to the acquisition of property, land reforms or the
imposition of ceiling on agricultural land.

3. By its decision dated 25th October, 1967 the High Court declared
the provisions of the Principal Act as ultra vires the Constitution and
quashed the notifications issued under the said Act, taking over the lands
C leased under the Grants Act. In 1970, the State of U.P. passed the Uttar
Pradesh Government Estates Thekedari Abolition [Re-enactment and
Validation] Act, 1970 [for short 'the Validation Act'] with the result that
the Principal Act and the notifications which had been issued thereunder
were revived by adding a deeming clause. Under the amended Princ;paI
D Act, the State issued notifications on 16th October, 1970 applying the
provisions of the U.P. Zamindari Abolition and Land Reforms Act, 1950
(for short 'the Z.A. Act') to the villages in question. In the year 1973, the
appellant who is the successor of Lala Khushi Ram, the original lessee,
received notices under the amended Principal Act and also received copies
of compensation roll showing the compensation at less than Rs. 3 per acre.
E The appellant, therefore, filed his objection before the Collector who
referred the matter to the respondent No. 1 - Additional District Judge.
On 17th December, 1977, respondent No. 1 partly accepted the reference.
The appellant, therefore, moved the High Court by a writ petition. On 19th
October, 1987 the High Court dismissed all the writ petitions before it by
the impugoed common judgment. Hence the present appeals.
F
4. The first contention raised in these appeals is that the State cannot
amend the Grants Act, which is a pre-constitutional central statute by its
own enactment, viz., the Principal Act so as to annul the provisions of
Section 3 of the Central Act. The answer to this contention lies in the
G provisions of Article 372 of the Constitution. The relevant provisions of
Article 372 are as under:
\

372. Continuance in force of existing laws and their adaptation-(1)
Notwithstanding the repeal by this Constitution of the enactments
'
H referred to in Article 395 but subject to the other provisions of this
KANWARLALv. IINDADDL.DJSTT.JUDGE[SAWANT,J.] 627

Constitution, all the laws in force in the territory of India imme- A
dlately before the commencement of this Constitution shall con-
tinue in force therein until altered or repealed or amended by a
competent Legislature or other competent authority.

(2) For the purpose of bringing the provisions of any law in force
in the territory of India into accord with the provisions of this B
Constitution, the President may by order make such adaptations
and modifications of such law, whether by way of repeal or amend-
I ment, as may be necessary or expedient, and provide that the law
shal~ as from such date as may be specified in the order, have
effect subject to the adaptations and modifications so made, and C
any such adaptation or modification shall not be questioned in any
court of law.

(3) Nothing in clause (2) shall be deemed -

(a) to empower the President to make any adaptation or D
modification of any law after the expiration of three years
from the commencement of this Constitution; or

(b) to prevent any competent Legislature or other competent
authority from repealing or amending any law adapted or
modified by the president under the said clause. E
Explanation I.- The expression "law in force" in this article shall
include a law passed or made by a Legislature or other competent
authority in the territory of India before the commencement of this
Constitution and not previously repealed, notwithstanding that it F
or parts of it may not be then in operation either at all or in
particular areas. 11

Entry 18 of List II of the Seventh Schedule of the Constitution reads as
under:
G
"18. Land, that is to say, rights in or over land, land tenures
including the relation oflandlord and tenant, and the collection of
rents; transfer and alienation of agricultural land; land improve-
ment and agricultural loans; colonization. 11

Article 246(3) read with Entry 18 of List II of the Seventh Schedule H
r

628 SUPREMECOURTREPORTS [1995] 3 S.C.R.

A gives power to the State Legislature to make law with regard to rights in
or over land, land tenures including the relation of landlord and tenant and
the collection of rents, transfer and alienation of agricultural land; land
improvement and agricultural loans; colonization. Admittedly, the lands in
question were under personal cultivation of the appellant and, therefore,
they are agricultural lands. Hence the State Legislature was competent to
B enact the Principal Act which concerns the rights in or over the land etc.
which are all subjects covered by Entry 18 of List II. In view of the
provisions' both of clauses (1) and (3) (b) of Article 372 of the Constitution,
therefore, the State Legislature being the competent legislature to enact '
such law could repeal or amend the Grants Act or any of its provisions
C including Section 3 thereof. This would be true also of the State amend-
ment of the Grants Act by the Government Grants (U.P. Amendment) Act,
1960. Hence the contention that the State Legislature could not amend the
provisions of Section 3 of the Grants Act has to be rejected.

5. The next contention of the appellant is that in the absence of a
D fresh notification issued under the amended Principal Act, the leasehold
rights of the appellant cannot be deemed to have been terminated, so as
to enable the State to resume the lands.

As the facts in the present case reveal, the Principal Act was ex-
E tended to the district of Nainital by notification dated 17th June, 1965 w.e.f.
26th June, 1965. By notification dated 30th June, 1966, issued under Section
3 of that Act, the lease of the appellant was determined. The High Court
declared as unconstitutional the provisions of that Act and hence the Act
was amended and re-enacted w.e.f. 20th June, 1964 by U.P. Government
Estates Thekedari Abolit1on (Re-enactment and Validation) Act, 1970.
F
Section 6 of the Validation Act validated anything done or purported to
have been done and any action taken or purported to have been taken
under the provisions of the Principal Act, viz., U .P. Government Estates
Thekedari Abolition Act. That Section reads as follows :

G "6. Notwithstanding any judgment, decree or order of any court or
Tribunal to the contrary, anything done or purporting to have been
done and any action taken or purporting to have been taken under
any provision of the principal Act before the commencement of
this Act including, in particular, any notification under sub-section
H (3) of section 1, any determination of lease under section 3, or the
KANWAR LAL v. !IND ADDL. D!STT. JUDGE [SAWANT, J.] 629

recovery of any rents or other dues under section 4 or the taking A
I
._.J over of possession or charge of land or of books, accounts or other
documents under section 6 of that Act, shall be deemed to be, and
always to have been as valid as if the provisions of this Act were
in force at all material times.

In view of the said express validating provision, the notifications B
which were issued under the Principal Act in terms revived 1vith the revival
of the Principal Act and hence the action taken under the said notifications
also stood validated. It was not necessary to reissue the notifications after
the enactment of the Validation Act. To argue to the contrary would
render the provisions of Section 6 of the Validation Act otiose. C

It is for this reason that we are unable to understand the reliance
placed on behalf of the appellant on the decision of this Court in Mahendra
Lal Jaini v. The State of Uttar Pradesh and Others, [1963) Supp. 1 SCR 912.
The question considered in that case was whether an Act which was invalid D
being ultra vires the provisions of the Constitution would stand revived
automatically on amendment of the relevant provision of the Constitution.
It was held that such a revival was not automatic and that the Act had to
be re-enacted after the constitutional provision which it had infringed was
amended. The ratio of that decision is, therefore, not applicable to the facts
of the present case. The Principal Act has been re-enacted by amending E
the relevant provisions to ring them in conformity with the provisions of
the Constitution and by the provisions of Section 6 of the Validation Act,
as pointed out above, all acts done and purported to have been done under
the principal Act have been expressly validated.
F
The next contention was that the Validation Act is violative of the
second proviso to Article 31A {1) of the Constitution. Under the lease
granted under the Grants Act, the rights of the lessee were heritable as
well as transferable. As a result of the determination of the lease by the
Thekedari Abolition Act, the rights which have been "conferred on the
lessee are only heritable. They are not transferable by virtue of the G
provisions of the U.P. Tenancy Act, 1939. Hence, the lessee is entitled to
foll compensation.

6. The relevant provisions of Article 31A (1) of the Constitution read
as follows : H
'
630 SUPREME COURT REPORTS (1995] 3 S.C.R.

A "31A. Savin,g of laws providing for acquisition of estates, etc. - (1)
Notwithstanding anything contained in Article 13, no law providing
for -

(a) the acquisition by the State of any estate or of any rights therein
or the extinguishment or modification of any such rights, or
B
x x x x x x

shall be deemed to be void on the ground that it is inconsistent
with, or takes away or abridges any of the rights conferred by
Article 14 or Article 19:
c
Provided that where such law is a law made by the Legislature
of a State, the provisions of this Article shall not apply thereto
unless such law, having been reserved for the consideration of the
President, has received his assent:
D
Provided further that where any law makes any provision for
the acquisition by the State of any estate and where any land
comprised therein is held by a person under his personal cultiva-
tion, it shall not be lawful for the State to acquire any portion of
such land as is within the ceiling limit applicable to him under any
E law for the time being in force or any building or structure standing
thereon or appurtenant thereto, unless the law relating to the
acquisition of such land, building or structure, provides for pay-
ment of compensation at a rate which shall not be less than the
market value thereof'.
F
What is prohibited by the aforesaid provision is acquisition by the
State of any portion of the land under personal cultivation which portion
is within the ceiling limit, without payment of its market value as compen-
sation. By virtue of the Principal Act, as amended, what is conferred
permanently on the erstwhile lessees under the Grants Act is the hereditary
G tenancy. The Principal Act as amended, by itself does not restrict the right
of the hereditary tenant to transfer the land. The restriction on the transfer
by a hereditary tenant has been placed by the U.P. Tenancy Act, 1939. It
is, therefore, not correct to say that it is the Principal Act as amended,
which places the restriction on the right of the hereditary tenant to transfer
H the land. Further while under the old lease, which is abolished by the
KANWARLALv. IINDADDL.DISTI.JUDGE[SAWANT,J.] 631

Principal Act, the lessee could hold the land only for the period of the A
lease which was in the present case, upto 2013, by virtue of the conferment
of the hereditary tenancy under the Principal Act, the lessee can now hold
such land permanently. It cannot be said that the conferment of the
permanent hereditary tenancy on the erstwhile tenure-lessee is in any way
inferior to the rights of the lessee under the old grant. Hence in the first B
instance, the question of payment of compensation does not arise. Second-
ly, a mere restriction on the incidence of the lease or ownership is not
acquisition within the meaning of Article 31A.

Article 31A(l)(a) of the Constitution states that no law providing for
the acquisition by the State of any estate or any rights therein or the C
extinguishment or modification of any such rights, shall be deemed to be
void on the ground that it is inconsistent with, or takes away or abridges
any of the rights conferred by Article 14 or Article 19. The second proviso
to Article 31A(l), however, states that where any law makes any provision
for the acquisition by the .State of any estate and where any land comprised D
in such estate is he1d by a person under his personal cultivation, it shall
not be lawful for the State to acquire the portion of such land as is within
the ceiling limit applicable to him under any law for the time being in force,
unless the law relating to the acquisition of such land provides for payment
of compensation at a rate which shall not be less than the market value
thereof. E

Thus there is a clear distinction between the provisions of Article
31A(l)(a) and of the second proviso to the said Article. Whereas Article
31A (1) (a) holds valid the acquisition by the State of any estate or of any
rights therein or the extinguishment or modification of any such rights, the F
second proviso carves out an exception to it by providing that (i) if any
estate is acquired by the State which comprises any land under personal
cultivation andc(ii) if such land is within the ceiling limit applicable to such
person, such land as is within the ceiling limit will not be acquired without
payment of compensation. In other words, the second proviso provides for
I
I compensation only if the land within the ceiling limit is wholly acquired by G
-/ the State. If only some of the rights of the person concerned in such land
are acquired or extinguished or are modified, the second proviso does not
come into play. In the present case, instead of having· the full rights as a
lessee including the right to transfer the land, the appellant will be a
hereditary tenant without the right to transfer the land. To that extent the H
632 SUPREME COURT REPORTS (1995] 3 S.C.R.

A rights of the appellant are modified or his right to transfer the land is
extinguished. He has not been deprived of all his rights. It is not, therefore,
a case of acquisition of his estate within the meaning of the second proviso
to Article 31A(l). Hence, the appellant is not entitled to compensation as
provided by the said proviso. Further, as pointed out earlier, the appellant
B is conferred with the rights as the hereditary tenant permanently in place
of his earlier rights as a tenure- lessee which were to expire after 2013. This
is, therefqre, a clear case of modification of the rights and not of acquisition
of all the rights, It cannot be contended further that this modification is '
less beneficial to the appellant. On this account also the second proviso to
Article 31A (1) requiring compensation to be paid, does not come into play
C in the present case.

7. It was then urged that in any case the appellant has become
Government lessee within the meaning of Section 133A of the U .P. Zamin-
dari Abolition and Land Reforms Act, 1950 (hereinafter called 'the Z.A.
Act') and hence the land would stand excluded from the provisions of the
D Principal Act. The provision of the Section 133A of the ZA. Act reads as
follows:

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

Since it is not disputed that by notification dated 16th October, 1970,
F the provisions of the ZA. Act have been made applicable to the said lands
and Section 133A has also been made applicable to the lands covered by
the Principal Act.

8. If the scheme of the amended Principal Act is examined, it would
appear that the Act has been passed to provide for abolition of the
G thekedari system in Government estates and the "Government estate" has
been defined in the Principal Act to mean land owned by the State 'I
Government in Uttar Pradesh which indicates that the Act is intended to
deal with government lands as well. Moreover, Section 3 of the amended
Principal Act which provides for determination of the lease starts with a
H non obstante clause. It reads as follows :
KANWAR LAL v. IIND ADDL. DISTI. JUDGE (SAWANT, J.] 633

"3. Determination of leases. Notwithstanding anything in any A
law, contract or other document, it shall be lawful for the State
Government by order published in the Official Gazette to deter-
mine with effect from a date (hereinafter called the date of deter-
mination) to be specified, any lease"

In view of this non obstante clause, Section 133A of the Z.A. Act B
cannot have the effect of denying the State the power under the said
Section 3 to determine the lease. Hence this contention must also fail.

9. There was no other contention raised. Appeals, therefore, fail for
the reasons given above and not for the reasons given by the High Court C
and are dismissed with costs.

v.s.s. Appeals dismissed.

J