Holding

A company that continues to occupy agricultural land after lease expiry retains juridical possession and is deemed a "holder" under Section 79‑B, making the declaration and vesting of the land in the State valid.

Summary

The respondents, owners of agricultural lands in Bijapur district, had leased the lands to M/s Sugarcane Products and Industries Ltd. for 30 years, a lease that expired on 31 March 1973 but the company continued to occupy the land. After the Karnataka Land Reforms Act, 1961 was amended in 1974, Section 79‑B prohibited companies from holding agricultural land and required them to file a declaration with the Tehsildar. The company filed such a declaration (mistakenly citing Section 66) and the authorities, after enquiry, vested 600 acres in the State. The respondents challenged the vesting, arguing that the company was not a "holder" under Section 79‑B because its lease had expired and its possession was unlawful. The Supreme Court held that, under Section 6 of the Act, a tenancy does not terminate merely on expiry of the lease, so the company's possession remained juridical and it qualified as a "holder" for the purposes of Section 79‑B. Consequently, the declaration and the vesting of the land in the State were valid. The Court set aside the High Court order and allowed the State's appeal.

Issues considered

Whether a company whose lease has expired but continues to occupy agricultural land is a "holder" under Section 79‑B of the Karnataka Land Reforms Act, 1961.
Whether the company's possession after lease expiry constitutes "juridical possession" under Section 6 of the Act.
Whether a declaration filed under a mis‑cited provision (Section 66) can still invoke the jurisdiction of authorities under Section 79‑B(3).

Legislation cited

Bombay Rent Acts. 13
Karnataka Land Reforms Act, 1961 (as amended 1974)s. 19, s. 20, s. 2(11), s. 2(21), s. 2(34), s. 44, s. 5, s. 58, s. 6, s. 60, s. 62, s. 79-B(1)(b), s. 79-B(2), s. 79-B(3)
Karnataka Land Revenue Act, 1964s. 2(11), s. 2(21), s. 2(34)
Transfer of Property Acts. 106, s. 116

Subjects

Land reformAgricultural landLease expiryJuridical possessionHolder definitionSection 79-BVesting in StateDeclaration

Judgment

,.,
---..:·
.,. STA.'f.E OF KARNATAKA A
v.
KRISHNAJI SRINIVAS KULKARNI AND ORS.

DECEMBER 16, 1993

[K. RAMASWAMY AND G.N. RAY;JJ.] B

Kamataka Land Reforms Act, 196J.,--Section 79-B-Prohibition that
Company could not hold aglicultural lan~Such land to vest in Govern-
ment-Even after expiry of /e,zse, .land possessed by Company-It filed the
requil!ed <teclaration-/.,and wsting in Government-Validity of-Quoting a C
wrong provision in the dec/ara ion----Wheth.et could take away the jurisdiction
.of the authorities,. t

The respondents leased their agricult~ral lands br a registered lease
dated April 1, 1942 for a peri >d of 30 years which stood expired on March
31, 1973, but tht; lands rem:iined in the p1>ssession of the Company-as D
tenant.

The Karnataka Land i ,eforms Act, 1961, was a1J1ended b)' AnJend-
ment Act 1 of 1974, and it c ime into effect from March 1, 1974. Under
sub-section(l)(b) of 79-B of the Act, a Company could not hold any ,g
agricultural land. Sub-secti(J n (2) mandated that every such company
should furnish to the Tehsildar havingjurisdiction over the land, a decla-
rati6n conf.aining the particulars of such lands and such other prescribed
particulars. ··

The lessee company submitted a declaration purporting to be under F
Section 66 of the Act. The Teh 1ildar after conducting the enquiry and after
giving opportunity to the res ~ondents, submitted the declaration to the
Deputy Commissioner who p11blished it in the prescribed manner. Thus
600 acres of demised lands i tood vested in the State free from all en-
cumbrances.
G
The respondents challe1 iged the action before the High Court con-
tending that as on March l 1974, the Company was not holding the
demised land as a tenant and he Company was, therefore, incompetent to
fifo any declaration under Se ;lion 66 and it could not be treated to be
under Section 79-B that its pl ssession was not lawful and, therefore, the H
971
972 SUPREME COURT REPORTS (1993) SUPP. 3 s.c.R.'

... A land dld not stand vest in the State, and that the Company was not a
holder under Section 79-B and the land owners were the actual holders· of
the lands.

The High Court held that the order under challenge was without
authority of law, being outside the purview of Section 79-8(3) of the AcL
B It did not, however, declare the ownership of the respondents.

In t~e appeal before this Court on behalf of the State tt was con• ~

tended that under Section 79·B(1), a person In posses11lon cultivating the
land persona11y should alone be entitled to hold the land; the Company
c having been declared to be disentltled to hold the lands on or from March
1, 1974 and being enjoined under 8ub-11edton (1) to furnish a declaration
to the Tehslldar having Jurisdiction over the land ol' IP'tater part thei'eol,
It was the 'holder' for the purpo1e or section '79·B of the Act Which was
made clear by sub•sec:tlon (1) thereof.

D On behalf of the respondents, lt was contended that the posse•slon of
the Company was unlawful as the leaae had expired by emux of time; that
500 acres were taken possession by them1 that though &00 actes remained In
the posseHlon of the Company, the Act did not divest their title; that the
Company had nelthit right to ftle any Illy declaration under Section 66, nor
under Section 19·B(1) nor was It nted within 90 days' llmltatloit prescribed
E
thereunder, and that since the tenant was bot cultivating the land, nor had
Juridical possession, the declaration under Section 79-B(3) was illegal, and
• the Interpretation given by thl! Hlgh Court was correcL

Allowing the appeal, this Court 4-
F
HELD : t. Section 79·B prohibits the Compatt)' dr any charitable
society or trust ur co-operative society, etc; to hold the lands, Section 2(11)
of the Land Revenue Act undoubtedly defines the expressloti 'holder', "to
mean In lawful possession of land whether such possessioti is actual or
not". This Court is not so much concerned with the lawful posses!iion or
G possession of a tenant holding over for the purpose of interpreting the
provisions of the Act. Section 6 specifically declares that despite the expiry
of lease by emux of time, the tenancy would not stand terminated and that,
f
therefore, the possession of the tenant/company statutorily remains to be
Juridical possession. The phrase 'holder' of the land in Section 79·B must
H be construed from that perspective. The contra contention violates the
STATE v. KULKARNI [RAMASWAMY, J.] 973
' '

sche.me and defeats the purpose of the Act. [976·D, G·H, 977·A] A
2.1. It is well settled law that on the expiry of the lease if the landlord
continues to receive rent without protest, he acquiesced to the continuance
in possession by the lessee and unless he Is lawfully ejected his possession
ca?not be held to be unlawful. (978-B]
B
2.2. Admittedly, in the instant case, the respondents on March 1,
1!>74 did not have possession of the lands. The <:ompany· lessee continued
tc1 hold the land. By operation of Section 6, though its lease had expired
bir emux of time, the lease did not stand terminated. In other words, the
C[)mpany's possession remains juridical possession under the Act. There· C
fore, on its being prohibited to remain in possession, the Company was
enjoined under Section 79·B(2) to furnish declaration and accordingly it
did furnish to the Tehsildar, though mistakenly done under quoting Sec·
tion 66(1). Quotation of a wrong provision does not take away the jurls·
dktion of the authorities to enq·ilre into under Section 79·B(3) of the Act.
n1erefore, the demised 600 acres land by the company rightly vested in the D
Stille free from aJI of encumbrances. (978-C·D]

Bhawaniji Lakhamshiu & Ors. v. Himatlal Jamnadas Dani & Ors.,
[Ul72] 2 S.C.R. 890 and M.C. Chockalingam & Ors. v. Manickavasagam &
Or.;., (1974) 2 S.C.R. 143, distinguished.
E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7465-82
of 1993.

From the Judgment and Order dated 18th .January, 1990 of the
Karnataka High Court in Civil W.P. Nos. 11215 to 11223, 14963 to 14965 F
an<l:. 15519 to 15524 of 1985.

K.H. Nobin Singh and M. Veerappa for the Appellants.

S.S. Javali and R.P. Wadhwani for the Respondents.
G
The Judgment of the Court was delivered by

K. RAMASWAMY, J. Special leave granted.

These appeals arise from the order of the division bench dated
January 18, 1990 of the Karnataka High Court in Writ Petition Nos. 11215· H
r
974 SUPREM!J COURT REPORTS (1993) SUPP. 3 S.C.R.

A 11223 of 1985 and batch. The respondents own different extents of agricul-
tural lands situated at Jambaga and other villages in Bijapur district of
Karnataka State which were in erstwhile part of Bombay province. They
. leased out their lands to M/s Sugarcane Products and Industries Ltd., a
registered company, by a registered lease dated April l, 1942 for a period
B of 30 years which stood expired on March 31, 1973, but remained in
possession as tenant. The Karnataka Land Reforms Act 1961, Act 10 of
1962 (for short 'the Act') was amended by Amendment Act l of 1974, (for
short 'the Amendment Act'). The latter came into effect from March l,
1974. Section 79-B of the Act prohibits holding of agricultural land by
certain persons. Sub-section (1) (b) declares that with effect from the date
C of the commencement of the Amendment Act, it shall not be lawful for a
company to hold any land. Sub-~. (2) the~eof mandates that every such
company to furnish to the Tehsildar having jurisdiction over the land,. a
declaration containing the particulars of such lands and such other
prescribed particulars. Under sub-s. (3) thereto the Tehsildar after enquiiy
D made in the prescribed manner should send the statement to the Dy.
Commissioner who declares, by notification that, 'such land shall vest in
the Stat~ Govt. free from all encumbrances'. Sub-section (4) gives right to
the owner of the land payment of compensation prescribed in s.7Z.. The
lessee company submitted a declaration, though purported to be under
s.66, but on the facts it must be one under s.79-B(2). The Tahsildar after
E conducting the enquiry and given opportunity to the respondents submitted
the declaration to the Dy. Commissioner who published in the prescribed
manner. Thus 600 acres of demised lands stood vested in the State free
from all encumbrances. The respondents challenged the action in the writ
petitions contending that as on March l, 1974 the company was not holding
F the demised land as a tenant. The Company, therefore, was incompetent .
to file any declaration under s.66 and it cannot be treated to be under
s.79-B. Its possession is not lawful and that, therefore, the land does not
stand vested in the State. The company was not a holder under s.79-B. The
land owners are holders of the lands. The High Court in ihe impugned
order rightly held that the impugned order was without authority of law,
G being outside the purview of s.79-B(3) of,the Act and the ownership of the
respondents, however, was not declared.

It is contended for the State that under s.79-B(l), a person in
---- possession cultivating the land personally shall alone be entitled to hold
-
H the land. The .Company
.
ha\ing been declared to be disentitled to hold the
.
.. STATE v. KULKARNI [RAMASWAMY, J.] 975

lands on or from March 1, 1974 and being enjoined under sub-s.(2) to A
furnish a declaration to the Tahsildar having jurisdiction over the land or
greater part thereof. It is the "holder" for the purpose of s.79-B of the Act.
It is made clear by sub-section (1) of Section 79-B. Shri Javali, learned
senior counsel for the respondents, placing reliance on s.2 (ii) of the
Karnataka Land Revenue Act, 1964, contended that the possession of the B
company was unlawful as the lease had expired by afflux of time. Five
hundred acres were taken possession by the lessors, land owner and 600
acres though remained in possession of the company, the Act did not divest
their title. Only the title of the land under personal cultivation of the tenant
having existed jural relationship of landlord and tenant alone stood
divested as envisaged under section 44. On expiry of the lease in the year C
1972·73 the possession of the tenant was not juridical, but only as tenant ·
hol(iing over but in unlawful possession. The lessors did not accept the rent
from the tenant. Therefore, the Company has neither right to file any
declaration under s.66 nor under s.77· 8(2) nor is it filed within 90 days
limitation prescribed thereunder. Section 79-8(2) postulates "holder of the D
land" while s.44 speaks of "land in personal cultivation of tenant". They
bring out the distinction that the holder must be one in lawful possession
and personally cultivating the land under s.2(11) of the Act. Since the
tenant was not cultivating the land, nor had juridical possession, the
declaration under s.79-8(3) is illegal and the interpretation given by the
High Court is correct. In support thereof he placed reliance on s.2(21), E
"the land owner", s.2(31) "holder", s.5, 19, 20, 44, 58, 62, 66 and 77.

With a view to appreciate the rival contentions it is necessary to look
into the scheme of the Act and the purpose envisaged therein. The Act is
an agrarian reform prescribing "ceiling on land holding" and "conferment F
of ownership on tenant". Section 2(11) defines personal cultivation, the
details of which are not material, but the explanation 1 to s.2(11) amplifies
that the land held by a Society, etc. shall be deemed to be cultivating
personally, if such a land is cultivated by hired labour or by servants under
the personal supervision of an employee or agent of such institution,
society, trust, etc. Under s.2(21), the owner of the land has been defined G
with an extended inclusive definition. Section 2(34) defines tenant means
an agriculturist who cultivates personally the land "he holds on lease from
a landlord". Section 5 prohibits grant of lease or creation of tenancy after
March 1, 1974 for any period whatsoever. Sub-section (2) gives exemption
. to seamen or soliders with which we are not concerned. Section 6 postu- H
976 SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R.

A !ates that "no tenancy of any land shall be terminated merely on the ground
that the period fixed for its. duration whether by agreement or otherwise
has expired". In other words, s.6 manifest the legislative intention that
notwithstanding the expiry of the lease by f'.fflux of time, the tenancy on
account thereof, should not stand terminated. A conjoint reading of ss.19,
B 20, 58, 60, 62 read with s.44 indicates that on or from March 1, 1974 the
tiller of the soil should alone be entitled to remain in possession and should
personally cultivate the land. The pre-existing right, title and interest of the
land owner stood extinguished and the lands stood vested in the State free
....
from all encumbrances. The Act confers ownership rights on the tenants
C in the manner prescribed by the Act. If he either ceases to cultivate the
land or leases to others or contravenes the grant, the conferment of
ownership of land stands terminated. The resultant consequences are that
the lands shall stand divested from him and revested in the State Govt. for
the purpose of assignment to the other tiller. Section 44 expressly divests
the title of the land-owner and conferred right only for compensation under
D s.72. Equally s.79-B prohibits the company or any charitable socjety or trust
or co-operative society, etc. to hold the lands. Sub-section (1) expressly
mandat.es that "no person other than a person cultivating land personally"
shall be entitled to hold land. In other words, a person be it owner or a
tenant, but be in possession and personally cultivating the land has been
E statutorily permitted to hold the land. The holding of the land owner is
subject to the ceiling under s.66. The company, etc. was prohibited to hold
land. A duty has been imposed by sub-s.(2) of s.79-B to furnish within 90
days, to the Tahsildar having jurisdiction a declaration concerning the land
held by it in the prescribed manner. In other words, the company is
enjoined to make the declaration. "On making such a declaration" that the
F specified land was held by it, sub-s.(3) provides the procedure for enquiry.
On compliance thereto and submission of a report after the prescribed
enquiry, by the Tahsildar, the Dy. Commissioner, he has been empowered
to declare by the notification that such land "shall vest in the State Govt.
free from all encumbrances" and take possession thereof in the prescribed
G manner. The definition of holder under s.2(11) of the Land Revenue Act
undoubtedly defines, "to mean in lawful possession of land whether such
possession is actual or not". We are not so much concerned with the lawful
possession or possession of a tenant holding over for the purpose of
interpreting the provisions of the Act. Section 6, as seen earlier, specifically
H declares that despite the expiry of lease by efflux of time, the tenancy would
- T.
STATE v. KULKARNI [RAMASWAMY, J.) 977

not stand terminated and that, therefore, the possession of the tenant/com- A
pany statutorily remains to be juridical possession. The phrase "holder" of
the land in s.79-B must be construed from that perspective. The contra
contention violates the scheme and defeats the purpose of the Act. It is to
be remembered that in respect of the matters covered under the Act, the
jurisdiction of the civil court has been ousted and conferred on the B
Tribunals under the Act. There is no forum ereated under the Act to
decide the rights of the land-owner and the erstwhile tenant.

In Bhawaniji Lakhamshiu & Ors. v. Himatlal Jamnadas Dani & Ors.,
[1972) 2 SCR 890, the facts were that after the lease had by the appellant
expired by efflux of time they remained in occupation and were paying the C
rent to the lessor. The leases were determined by issue of notice under
s.106 of the Transfer of Property Act an~ the suit was tiled for decree of
eviction on the ground of personal requirement. One of the defences was
that after the lease was determined the lessor accepted the rent. Therefore~

- as tenant holding over he was entitled to the protection of s.13 of the D
Bombay Rent Act. That was negatived by all the courts and decree for
eviction was granted. This Court held that the act of holding over, after
expiry of the lease, . does not qeate a tenancy of any kind. After he
continued with the consent of the landlord he is a tenant at sufferance and
:.1

without consent he is not a tenant holding over. Under s.116 of Transfer
of Property Act the assent of the landlord for the continuance of the E
possession after the lease w~s determined creates a new tenancy, but there
must be bilateral assent expressly or otherwise. Accordingly it was held that
there was no proof that the landlord had accepted the rent agreeing to
... continue the tenancy. The ratio therein has no application to the facts of
this case. In M.C. Chockalingam & Ors. v. Manickavasagam & Ors., (1974) p
2 SCR 143, the question therein was whether the lessee of a Cinema
Theatre, after the expiry of the lease was having lawful possession under
Rule 13 of Madras Cinemas Regulations. In that context this court held
that by the language of rule 3 it is implicit that the owner is having a title
to the property if he can satisfy the licensing authority that the tenant,
though was in possession, his possession was not lawful, but litiguous G
possession and he is not entitled to the renewal of the licence. Lawful
possession cannot be established without a concomitant existence of lawful
relationship between the landlord and the tenant. This relationship cannot
be established against the consent of the landlord unless his consent
becomes under special law, irrelevant. Lawful possession is not litiguous . H
978 SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R. • J

A possession and must have some foundation in legal right to possess the
property which cannot be equated with a temporary right to enforce
recovery of the property in case a person who is wrongly or forcefully
dispossessed from it. Therefore, the ratio in the above decision also is not
of any assistance to the respondents. It is also equally well settled law that
B of the expiry of the lease of the landlord, the rent of the landlord continues
to receive without protest, he a~uiesed to the continuance in possession
by the lessee and unless he is lawfully ejected his possession cannot be held
to be unlawful.

As seen, admittedly the respondents as on March 1, 1974 did not
C have possession of the lands. The company lessee continued to hold the
land. By operation. of s.6 though its lease had expired by efflux of time, the
lease did not stand terminated. In other words, his possession remains
juridical possession under the Act. Therefore, on its being prohibited to
remain in possession, the company was enjoined under s.79-B{2) to furnish
declaration and accordingly he did furnish to the Tahsildar, though mis-
D takenly done by quoting s.66(1). Quotation of a wrong provision does not
take away the jurisdiction of the authorities to enquire under s.79B{3) of
the Act. The tribunals, therefore, had jurisdiction to enquire into and
publish the declaration as enjoined under s.79-B{3) of the Act. Th~
demised 600 acres land held by the company stood vested in the State free
E of encumbrances.
Accordingly the order of the High Court is clearly illegal. Jt.-is ·set
aside and the action of the Dy. Commissioner under s.79-B{3) is upheld.
The appeals are allowed, but without costs. ·

N.P.V. Appeals allowed.