Holding

Explanation I to Section 87(1) applies, so land whose exemption under Section 81(1)(k) ceases is deemed to have been acquired after the notified date, and Section 85 cannot be used to determine ceiling area as on that date.

Summary

The respondent, a partner in an industrial undertaking, claimed exemption of a parcel of land under Section 81(1)(k) of the Kerala Land Reforms Act, 1963, on the ground that it was set aside for industrial use. The District Collector later issued a notice requiring the land to be put to actual industrial use by a specified date, which the respondent failed to comply with. The Taluk Land Board then initiated proceedings under Section 85 to determine excess land as on the notified date of 1 January 1970 and ordered surrender. The Kerala High Court held that, because the exemption ceased on the date of non‑compliance, Explanation I to Section 87 makes the land a deemed acquisition after 1 January 1970, rendering Section 85 inapplicable. On appeal, the Supreme Court affirmed this view, stating that the language of the Act is clear and that the exemption’s cessation triggers the deemed‑acquisition rule. Consequently, the appeal was dismissed and the order of the High Court upheld.

Issues considered

Whether Explanation I to Section 87(1) of the Kerala Land Reforms Act, 1963 applies when land exempted under Section 81(1)(k) ceases to be exempted
Whether the Taluk Land Board can invoke Section 85 to determine ceiling area as on the notified date of 1 January 1970 in such circumstances

Legislation cited

Kerala Land Reforms Act, 1963s. 81(1)(k), s. 83, s. 85, s. 86, s. 87(1)

Subjects

Land reformsExemptionSection 87Deemed acquisitionCeiling landStatutory interpretationKerala Land Reforms ActIndustrial land

Judgment

STATE OF KERALA AND ORS. A
v.
DR. S.G. SARVOTHAMA PRABHU

FEBRUARY 26, 1999

(KT. THOMAS AND S.S.M. QUADRI, JJ.] B

Tenancy and Land Laws :

Kera/a Land Ref01ms Act, 1963 : Sections 81(1)(k) & Proviso, 83,
85(1) and 87(1) Explanation 1. C
Exempted /and-Deemed acquisition--Dqte of~e/d : where a land is
exempted under S. 81 and such exemption is in force on the notified date
(1.1.1970) such land, with effect from the date on which it ceases to be
exempted, would be deemed to have been acquired under Explanation 1 to
S. 87(1)-Hence, High Cowt rightly held that the Taluk Land Board cannot D
again initiate proceedings under S. 85 to detennine the ceiling area as on the
notified date.

Interpretation of Statutes :

Basic rules-Legislative intent-Detennination of-Held : Intention of E
Legislature to be ascertained from the language of the statute-!/ the words
are unambiguous, clear and explicit there need be no recourse to any other
rules of interpretation-After such interpretation the law must be applied to
the facts of the case iTTespective of the consequence that a person gets the
benefit of his own wrong. F

The respondent was the owner of a certain land and claimed exemp-
tion of the land under Section 81 (1) (k) of the Kerala Land Reforms Act,
1963 ·since the land was set aside for industrial use. But as the land was
not actually put to industrial use the Taluk Land Board in a proceeding
under Section 85 of the Act directed the respondent to surrender the excess G
land. However, the High Court held that the respondent was entitled to
avail himself of the exemption since the Collector had not issued any
notice under the said proviso to Section Sl(l)(k) of the Act. Thereafter,
the Collector issued a notice under the said proviso directing the respon-
dent to put the said land to industrial use before 12.12.1982. H
915
916 SUPREME COURT REPORTS (1999] 1 S.C.R.
A On failure of the respondent to comply with the notice of the Collec·
tor, the Taluk Lank Board initiated a fresh proceeding under Section 85 of
the Act, determined the excess land as on the notified date (1.1.1970) and
directed the respondent to surrender the excess land. The respondent filed
a revision before the High Court, which was allowed. Hence this appeal.

B Dismissing the appeal, this Court

HELD : 1.1. The language of Section 87 of the Kerala Land Reforms
Act, 1963 is clear, plain and lucid. Section 87 concerns itself with the
surrender of excess land to the authority under the Act where a person
C acquires any land after the notified date, i.e. 1.1.1970, by gift, purchase,
mortgage with possession, lease, surrender or any other kind of transfer
inter vivos or by bequest or inheritance or otherwise and in consequence
thereof, the total extent of land owned or held by such person exceeds the
ceiling area. Explanation I to Section 87(1) says that where a land is
exempted under Section 81 and such exemption is in force o~ 1.1.1970 then
D such land shall, with effect from the date of which it ceases to be exempted,
be deemed to be land acquired after that date. Sub-section (2) further
makes it clear that the provisions of Sections 85 and 86 apply to vesting in
the Government of the ownership or possession or both of the lands re-
quired to be surrendered under sub-section (1) of Section 87 only. There·
E fore, Section 85(1) which deals with surrender of excess land in excess of
the ceiling area on the notified date (1.1.1970) cannot be applied in cases
falling under the Explanation to Section 87 of the Act whereunder land is
deemed to be acquired after that date. [920-H; 921-A·D]

1.2. In the instant case, exemption of the land under Section 81 (1) (k)
F which was in force on 1.1.1970, ceased with effect from 12.12.1982. So in view ,.
of Explanation I to Section 87 of the Act there will be a deemed acquisition
of that land after 1.1.1970. The High Court is, therefore, right in holding
that the Taluk Land Board cannot again initiate proceeding under Section
85 of the Act and determine ceiling area as on 1.1.1970. [921-E]

G 2. In the instant case, the respondent having claimed the benefit of
exemption, enjoyed possession of the land for more than 12 years,
defaulted in complying with the requirements of the proviso to Section
81(l)(k), successfully avoided surrender of the land under Section 85(1)
on the basis of calculation of the ceiling area as on 1.1.1970 and is thus
H getting benefit of his own wrong in claiming the aid of Explanation I to
>-

STATE v. DR. S.G. SARVOTIIAMAPRABHU [QUADRI, J.] 917

Section 87. But it cannot be lost sight of that the function of the Court is A
to interpret law according to the intention of the Legislature and apply it
to the facts of the case before it. And the intention of the Legislature has
to be determined from the language of the statute. If the words are
unambiguous, clear and explicit there need be no recourse to any other
rules of interpretation. (920-B-C]
B
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4954 of
1989.

From the Judgment and Order dated 25.9.87 of the Kerala High
Court in C.R.P. No. 1158 of 1985.
c
G. Prakash for the Appellants.

T.L.V. Iyer, V.B. Saharya Adv. for M/s. Saharya & Co. for the
Respondent.
4 D
The Judgment of the Court was delivered by :

QUADRI, J. This appeal by the State of Kerala and others, is against
the judgment and order of the High Court of Kerala in CRP No. 1158
dated September 25, 1987. The short question that is posed here is whether
Explanation I to sub-section (1) of Section 87 applies when land under E
Section 81(1)(k) of the Kerala Land Reforms Act ceases to be exempted.

This question arises in the following factual backdrop :

The respondent is a partner of a firm, an industrial undertaking. He
claimed exemption of the land in question under Section 81(I)(k) of the F
Kerala Land Reforms Act (for short 'the Act'). The Taluk Land Board,
Kodungallur, in proceeding under Section 85 of the Act opined that he was
not entitled to the exemption as the land was not actually put to industrial
use and directed him to surrender the excess land measuring 3.22.250
acres. The respondent carried the matter in revision before the High Court. G
Observing that there was nothing on record to show that the District
Collector had issued any notice under proviso to Section 81(1)(k), the High
:> Court held that the respondent was entitled to avail the exemption. There-
after, the Collector issued notice under the proviso directing the respon-
dent to put to use the said and before December 12, 1982. On failure of H
918 SUPREME COURT REPORTS [1999] 1 S.C.R.

A the respondent to comply with the notice of the Collector, the Taluk Land ~
Board proceeded under Section 85 of the Act, determined the excess land
as on 1.1.1970 and directed him to surrender the said extent of land. The
respondent again carried the matter in revision before the High Court of
Kerala. It was pointed out by the High Court that in the earlier round of
B litigation the exemption under Section 81(1)(k) was held applicable but as
it ceased to apply subsequent to the notified date (1.1.1970), section 87 of
the Act was attracted and thus a!lowed the revision on September 25, 1987.
The correctness of that order is assailed before us.

Mr. G. Prakash, learned counsel appearing for the appellant, argued
C that exemption under Section 81(I)(k) of the Act was according to use of
the land and as the land was never used for any industrial purpose, the
cessation of the exemption should be as on the notified date, 1.1.1970. In
other words, the contention is that as the land in question was held by the
respondent on 1.1.1970 and exemption ceased to apply due to non- user of
D the land for industrial purpose within the time specified by the Collector
the cessation of exemption must relate back to 1.1.1970 hence there is no
scope to invoke Section 87 of the Act.

Mr. T.L.V. Iyer, learned senior counsel appearing for the respon-
dent, on the other hand, argued that on cessation of the exemption under
E section 81(1)(k) as Explanation I to section 87 squarely applies, so the land
would be deemed to be acquired after the notified date.

To resolve the controversy it will be useful to refer to the relevant
provisions in Chapter III of the Act which deals with the restriction on
ownership and possession of land in excess of ceiling area and provides for
F disposal of excess land. Section 81 of the Act contains various categories
of land which are exempted from the provisions of Chapter III. Clause (k)
of sub-section (1) of Section 81 with which we are concerned here, is
extracted hereunder :

G "81 Exemptions - (1) The provisions of this Chapter shall not apply
to -

(a) to G) ••• **** •••
(k) Lands belonging to or held by an industrial or commercial
H undertaking at the commencement of this Act, and set apart for
·,

?

STATEv. DR.S.G.SARVOTIIAMAPRABHU[QUADRI,J.) 919

use for the industrial or commercial purposes of the undertak- A
ing:

Provided that the exemption under this clause shall cease to
apply if such land is not actually used for the purpose for which it
has been set apart, within such time as the District Collector may,
by notice to the undertaking, specify in that behalf." B

A plain reading of clause (k) shows that to avail oneself of the exemption
two requirements must be satisfied : (i) the land must belong to or held by
an industrial or commercial undertaking at the commencement of the Act;
and (ii) the land must have been set apart for use for industrial or C
commercial purpose of the undertaking. On fulfilment of these conditions
the beneficial provision of the exemption must be given full effect to
notwithstanding the fact that the land is not actually used for industrial or
commercial purpose. However, it must be noted that the exemption ceases
cJ. to apply on non-user of the land, for the purpose for which it is set apart, D
within such time as specified by the Collector in the notice given to the
undertaking. Obviously, the intention of the Legislature is to exempt such
land of industrial or commercial undertaking which though not in actual
use for industrial or commercial purposes, perhaps due to economic or
other constraints on the undertaking, was set apart for use in future for
development of industrial commercial undertaking. To ensure that in the E
guise of setting the land apart for industrial or commercial purpose the
beneficial provision is not misused and the object of the exemption is not
frustrated, proviso is added authorising the Collector to specify by notice
to the undertaking time within which the iand should be used for the
purpose for which it has been set apart and providing that in the event of F
failure of the undertaking so to do the exemption shall cease to apply.

Having regard to the fact that the requirements of clause (k) were
satisfied by the respondent and the Collector had not specified by then the
date within which the land should be used for the purpose for Which it was
set apart, the High Court in the first round of litigation held, in our view rightly, G
that he could avail himself of the exemption. But after the order of the High
· Court the Collector by notice to the respondent specified August 10, 1982 for
using the land for the purpose for which it was set apart The respondent failed
to comply with the directions contained in the notice, so cessation of exeuip-
tion would operate with effect from August 10, 1982. H
-<;'
t

920 SUPREME COURT REPORTS [1999] 1 S.C.R: r
~
A The contention of Mr. Prakash that on cessation of exemption due
to non-compliance of the notice of the Collector the land should be treated
as held on 1.1.1970 and ceiling area should be worked out under Section
85 of the Act is attractive and appealing. It is apparent in this case that
the respondent having claimed the benefit of exemption enjoyed possession
of the land for more than 12 years and defaulted in complying with the
B requirements of the proviso to section 81(1)(k), successfully avoided sur- )'
render of land under section 85(1) on the basis of calculation of the ceiling
area as on 1.1.1970 and is thus getting benefit of his own wrong in claiming
aid of Explanation I to section 87. But it cannot be lost sight of that the
function of the Court is to interpret law according to the intention of the
c Legislature and apply to facts of the case before it. And the intention of
the Legislature has to be ascertained from the language of the statute. If
the words are unambiguous, clear and explicit there need be no recourse
to any rules of interpretation.

Now it would be appropriate to refer to Explanation I to Section 87
D of the Act which is as under : +

"87. Excess land obtained by gift, etc., to be su"endered - (1) Where
any person acquires any land after the date notified under Section
83 by gift, purchase, mortgage with possession, lease surrender or
E any other kind of transfer inter vivos or by bequest or inheritance .
or otherwise and in consequence thereof, the total extent of land
owned or held by such person exceeds the ceiling area, such excess
shall be surrendered to such authority as may be prescribed.

Explanation I - Where any land is exempted by or under Section
F 81 and such exemption is in force on the date notified under
,.
Section 83, such land shall, with effect from the date on which it
ceases to be exempted, be deemed to be land acquired after the
date notified under section 83."

The language of the provision extracted above, it could be seen, is clear,
G plain and lucid. Section 87 concerns itself with the surrender of excess land
to the authority under the Act where a person acquires any land after the
notified date, 1.1.1970, by gift, purchase, mortgage with possession, lease,
-<
surrender or any other kind of transfer inter vivos or by bequest or
inheritance or otherwise and in consequence thereof, the total extent of
H land owned or held by such person exceeds the ceiling area. Then question
STATE v. DR. S.G. SARVOTHAMA PRABHU [QUADRI, J.] 921

arises for purposes of sub-section 87 whether the excess land should be A
arrived at as on the date of notification under Section 83(1.1.1970), or on
the date of cessation of exemption of the land. To obviate this difficulty,
Explanation I is appended to section 87(1) of the Act. The Explanation
says that where a land is exempted under Section 81 and such exemption
is in force on 1.1.1970 then such land shall, with effect from the date on
which it ceases to be exempted, be deemed to be land acquired after that
B
date. For this purpose sub-clause (lA) imposes an obligation on the person
who falls within sub-section (1) to file a statement containing the par-
ticulars specified in sub-section (1) of Section 85A within a period of three
months of the date of the acquisition. Sub-section (2) further makes it clear
that the provisions of sections 85 and 86 apply to 'vesting in the Government c
of the ownership or possession or both of the lands required to be sur-
rendered under sub-section (1) of Section 87 only. This being the intention
of the legislature, effect must be given· to it ungrudgingly. Therefore,
Section 85(1) which deals with surrender of excess land in excess of the
ceiling area on the ·notified date (1.1.1970) cannot be applied in cases D
falling under Section 87 of the Act whereunder land is deemt<d to be
acquired after that date.

In the instant case, exemption of the land under Section 81(1)(k)
which was in force on 1.1.1970, ceased with effect from August 10,1982.
So in view of Explanation I to Section 87 of the Act there will be a deemed E
acquisition of that land after 1.1.1970. The High Court is, therefore, right
in holding that the Taluk Land Board cannot again initiate proceeding
under section 85 of the Act and determine ceiling area as on 1.1.1970.

For the abovementioned reasons, we find no illegality in the order of
the High Court. The appeal is, therefore, dismissed .. But having regard to F
the facts of the case we make no order as to costs.

v.s.s. Appeal dismissed.