Holding

Condition (ii) requires the trust to establish that the entire income derivable from only the lands for which the exemption certificate is sought is appropriated for the trust’s purposes.

Summary

The Hajlirat Pir, Babujmal, Deosthan Public Trust (the respondent) applied for an exemption certificate under Section 88‑B of the Bombay Tenancy and Agricultural Lands Act, 1948 for certain lands occupied by the appellants as tenants. The Deputy Collector granted the certificate after finding the trust registered under the Bombay Public Trusts Act and that the income from those lands was appropriated for the trust’s purposes. The Revenue Tribunal set aside the certificate, holding that the trust must show that the entire income from all its lands was appropriated, a view the High Court upheld. On appeal, the Supreme Court examined the meaning of condition (ii) of the proviso to clause (b) of sub‑section (1) of Section 88‑B. It held that the condition requires the trust to demonstrate that the entire income from only the lands for which exemption is sought is appropriated for trust purposes, not the income from all its lands. Consequently, the exemption certificate was valid and the appeal was dismissed.

Issues considered

Whether condition (ii) of the proviso to clause (b) of sub‑section (1) of Section 88‑B of the Bombay Tenancy and Agricultural Lands Act requires a trust to show that the entire income from all its lands is appropriated for trust purposes, or only the income from the lands for which exemption is sought.

Legislation cited

Bombay Public Trusts Act, 1950
Bombay Tenancy and Agricultural Lands Act, 1948s. 88-B(1), s. 88-B(2)
Bombay Tenancy and Agricultural Lands Rules, 1956s. Rule 52(1)

Subjects

exemption certificatetrust income appropriationSection 88-Bpublic religious worship trusttenancy lawinterpretation of statutory conditionrevenue tribunalhigh court

Judgment

A SMT. LAXMIRAJ S. PATIL AND ORS.
v. .{
BADASHAH SULTAN MUTWALI

MARCH 22, 1995

B [N. VENKATACHALA AND SUJATA V. MANOHAR, JJ.J

Bombay Tenancy and Agricultural Lands Act, 1948 :

S.88-B-Exemption Certificate-Income from lands appropriated for -,. -
c the purposes of the Trust under Condition (ii) of the proviso-Confined to
income from such lands for which exemption certificate sought for and n.ot
from other lands.

Appellants were tenants of some of the lands of a certain Trust of
which the Respondent was the Managing Trustee. Respondent made an
D application under Rule 52(1) of the Bombay Tenancy and Agricultural
Lands Rules, 1956 before the Deputy Collector for grant of exemption
certificate under S.88-B of the Act in respect of its lands on which the
appellants were tenants. The Deputy Collector granted the certificate.

E On a revision preferred by the appellants, the Revenue Tribunal held
that the exemption certificate should not have been granted when it was
not shown by the Trust that the entire income of all its lands had been
appropriated for the purpose of the Trust as was required by Condition
(ii) of the proviso to clause (b) of Sub-section (i) of S.88-B of the Act.
F Respondent flied a Civil Application which was allowed. Appellants filed
a Writ Petition challenging the validity of the Certificate, and the same was
~-.
dismissed by the High Court. Hence this appeal. "'"-
Dismissing the appeal, this Court -,.--
G HELD:l. As seen from the provision in Section 88-b(l) and 88·B(2)
of the Bombay· Tenancy and Agricultural Lands Act, 1948 exemption
certificate could be obtained by a trust in respect of its lands in occupation
of tenants as provided for therein. The object of obtaining such exemption,
~-
having regard to the scheme of the provision, is to allow the Trust to retain
.H the Income of Its lands, even where such lands are given to tenants for
928
)

L.S. PATIL-v. B.S. MUTWALI 929
cultivation. There is no reason why the Trust should ·establish that the A
entire income derived by it from lands other than the lands in respect of
which it seeks exemption certificate, was being appropriated for the Trust.
The entire income .or "such lands" required to be shown to have been
appropriated for purposes of the Trust under Condition (ii) of the proviso
is confined to the income derived lands for which exemption certificate is B
sought by the Trust and not its other lands. [For to hold that the Trust
when applies for exemption certificate· in respect of a few or its lands is
required to establish for satisfying condition (ii) of the proviso that the
entire income derived from all its other lands, would amount to asking the
Trust to establish something which the Legislature could not have in- C
tended having regard to the fact that such requirement could only by an
unwarranted burden placed on the Trust with no genuine purpose to be
serve by it.] [932-D-GJ

(Condition (ii) of the proviso to Clause (b) of Sub- section(l) of
Section 88-B of the Act, requires a trust which seeks to obtain an exemption D
certificate under Section 88-B of the BT&AT Act in respect ~f certain
lands, to establish before the Collector that the entire income derivable by
it in respect of only such lands for which exemption certificate is sought
was being appropriated for the purposes of the Trust and not the entire
income derivable by it in respect of its other lands for which no exemption E
certificate was sought.) [932-H, 933-AJ

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 380 of
1984.

From the Judgment and Order 7.11.93 of the Bombay High Court in F
S.C.A. No. 3186 of 1978.

U.R. Lalit, P.H .. Parekh, Uday U. Lalit and E.R. Kumar, with him
----... for the Appellants.

V.N. Ganpule,V.B. Goshi and AB. Lal, with him for the Respon- G
dent.

The following Order of the Court was delivered :

Substitution application is allowed. H
930 SUPREME COURT REPORTS (1995] 2 S.C.R.

A We have heard learned counsel for the parties. The short question
which arises for our consideration in this appeal relates to requirement of
,.(
Condition (ii) of the proviso to Clause (b) of sub-section (1) of Section
88-B of the Bombay Tenancy and Agricultural Lands Act, 1948 - "The
BT&ALAct".
B Respondent is the Managing Trustee of the Hajlirat Pir, Babujmal,
Deosthan Public Trust, Kolhapur. The appellants were tenants of some of
the lands of that Trust under the BT&AL Act. The respondent made an
application under Rule 52(1) of the Bombay Tenancy and Agricultural
Lands Rules, 1956 before the District Deputy Collector, Karvir Division,
C Kolhapur seeking grant of an exemption certificate under Section 88-B of
the BT&AL Act in favour of the Trust in respect of its lands on which the
appellants were the tenants. That Collector on an enquiry held under
sub-section (2) of Section 88-B of the BT&AL Act, being .. atisfied that the
Trust was an institution·for public religious worship registered under the
D Bombay Public Trusts Act, 1950 as required by Clause (i) of the proviso
to Sub-section. (1) of Section 88-B of the BT&AL Act and the entire
income from the lands for which exemption certificate was sought was
appropriated for the purpose of the Trust as required by Clause (ii) of the
proviso to Sub-section (1)_ of Section 88"B thereof, granted the certificate
E of exemption sought for, on May 27, 1963.
The appellants challenged the validity of the certificate so granted,
by filing a revision petition in that behalf before the Maharashtra Revenue
TribUn.al, Kolhapur - "the Tribunal". The Tribunal taking the view that the
F exemption certificate should not have been granted by the Collector when
it was not shown on behalf of the Trust that the entire income of all lands
of the Trust had been appropriated for the purpose of the Trust, as was
required by Condition (ii) of the proviso to Clause (b) of sub-section (1)
of Section 88-B of the BT&AL Act, made an order allowing that Revision
Petition. The respondent questioned the correctness of that order of the
G Tribunal by filing Special Civil Application No. 3186 of 1978 before the
High Court of Bombay. In the meantime, when in one of that cases, the
Bombay High Court held that the Tribunal had no jurisdiction to entertain
a revision petition against grant of certificate of exemption under Section
88-B of the BT&AL Act, the appellants challenged the validity of the
H certificate of exemption granted by the Collector in favour of the Trust by
)
L.S. PATILv. B.S.MUTWALI 931
filing Writ Petition No. 3771 of 1981. The High Court by its judgment dated A
November 7, 1983 while allowed the Special Civil Application No. 3186 of
1978 of the respondent, dismissed Writ Petition No. 3771 of 1981 of the
appellants. It is that order of the High Court which has been impugned by
the appellants in this appeal by special leave.

As the arguments of learned counsel for the parties in the appeal B
were confined to the requirement of Condition (ii) of the proviso to Clause
(b) of Sub-section (1) of Section 88-B of the BT&L Act, their sustainability
calls to be examined.

Section 28-B of the BT&AL Act, insofar as it becomes necessary to C
deal with the said arguments, reads thus:

88-B (1) Nothing in the foregoing provisions except sections 3, 4B,
8, 9, 9A, 9B, 9C, 10, lOA, 11, 13 and 27 and the provisions of
Chapters VI and VIII in so far as the provisions of the said
Chapters are applicable to any of the matters referred to in the D
sections mentioned above, shall apply -

(a) ...... .

(b) to lands which are the property of a trust for an educational
purpose, a hospital, Panjarapole, Gaushala or an institution for E
public religious worship:

Provided that -

(i) such trust is or is deemed to be registered under the Boni.bay F
Public Trusts Act, 1950, and

(ii) the entire income of such lands is appropriated for tile
purposes of such trust; .....

(2) For the purposes of this section, a certificate granted by G
the Collector, after holding an inquiry, that the conditions in the
proviso to Sub-section (1) are satisfied by any trust shall be
conclusive evidence in that behalf."

It was not disputed before us that the Collector who held the inquiry
as required by Sub-section (2) of Section 88-B of the BT&AL Act issued H
\_ -

932 SUPREME COURT REPORTS [1.995] 2 S.C.R.

A the certificate of exemption in favour of the Trust in respect of a few of its
lands of which the appellants were the tenants, on being satisfied that the
Trust is registered under the Bombay Puplic Trust Act, 1950 and the
income of such lands had been appropriated for the purposes of such trust.
What was argued on behalf of the appellants was that Condition (ii) in the
B above proviso required the Trust to establish that the entire income of all
its tenanted lands was appropriated for its purposes for obtaining the grant
of a certificate of exemption under Section 88-B of the BT&AL Act. On
the other hand, it was argued for the respondent that Condition (ii) of the
above proviso required the Trust to establish that the entire income of
C merely the lands for which exemption certificate was sought for was being
appropriated for the purposes of trust for obtaining the exemption certifi-
cate. As seen from the provision in Section 88-B{l) and 88-B(2) of the
BT&AL Act exemption certificate could be obtained by a trust in respect
of its lands in occupation of tenants as provided for therein. The object of
D obtaining such exemption, if we have regard to the scheme of the provision,
is to allow the Trust to retain the income of its lands, even where such
lands are given to tenants for cultivation. Thus, if the object of the provision
is to save the income of the lands of the Trust for appropriating for

E
purposes of this Trust, W,e are unable to see as to why the Trust should
establish that .the entire income derived by it from lands other than the
+
lands in respect of which it seeks exemption certificate, \.as being ap-
propriated for the Trust. The entire income of such lands required to be
shown to have been appropriated for purposes of the Trust under Condi-
tion (ii) of the proviso, as seen therefrom, is confined to the income derived
F from such lands for which exemption certificate is sought for by the Trust
and not its other lands, for to hold that· the Trust when applies for
exemption certificate in respect of a few of its lands iS required to establish
for satisfying Condition {ii) of the proviso that the entire income derived
from all its other lands, would amount to asking the Trust to establish
G something which the Legislature could not have intended having regard to
the fact that such requirement could only be an unwarranted burden placed
on the Trust with no genuine purpose to be served by it.

Hence, Condition (ii) of the proviso to Clause {b) of Sub-section (1)
of Section 88-B of the BT&AL Act, in our view, requires a trust which
H seeks to obtain an exemption certificate under Section 88-B of t~e BT&AL
)
LS. PATIL v. B.S. MUTWALI 933
Act in respect of certain lands, to establish before the Collector that the A
entire income derivable by it in respect of only such lands for which
exemption certificate is sought was being appropriated for the purposes of
the Trust and not the entire income derivable by it in respect of its other
lands for which no exemption certificate was sought.

In the result, we dismiss.this appeal, however, without costs. B
G.N. Appeal dismissed
\-.__...,..