STATE OF ORISSAversusNITYANAND SATPATHY AND ORS.

A                           STATE OF ORI SSA
                                   v.
                      NITYANAND SATPATHY AND ORS.

                                  JULY 31, 2003                                       (-

B      [V.N. KHARE, CJ., K.G. BALAKRISHNAN AND S.B. SINHA, JJ.]


          Orissa Estates Abolition Act, 1953:

C          S. 7-Non-agricultural and 'anabadi' land-Application for settlement
    of-Intermediary in possession of 'anabadi' land-After his deaih his sons
    executed leases thereof-Dy. Collector revoked the leases-Application by
    sons for settlement of land in their favour-Allowed by Collector Land sold-
    Board of Revenue u/s. 38 by suo motu power revoked t/iie settlement-Writ
    petition challenging order ofBoard of Revenue allowed by High Court-Held
D   the settlement made in favour of ex-intermediary his sons was bad in law-
    The land being 'anabadi' land must be deemed to have vested in the State
    Government-In terms ofsub-section (1) ofS. 7 only the land usedfor cultivation
    and horticulture purposes and which were in 'khas possession' of an
    intermediary on the date of vesting would be conceived-For the purpose of
E   taking benefit of S. 7(J)(a) the intermediary must be in cultivating possession
    of the land either by himself, with his own stock or by his own servants or by
    hired labour or with hired stock-The nature and character of the land being
    non-agricultural~ the same evidently was not in cultivating possession of the
    intermediary and, thus, an application for settlement ofthe said land purported
    to be in terms of S. 7 was not maintainable-Furthermore, the land being not
F   used.either for cultivation or for horticulture purposes on the date of vesting
    did not attract the provisions ofclause (a) of sub-section (1) of S. 7-Judgment
    of High Court set aside.

          S. 2(J)- 'khas possession '-Meaning of

G         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7670of1997.

         From the Judgment and Order dated 22.7.1996 of the Orissa High
    Court in O.J.C. No. 215 of 1992.

          J.K. Das, Janaranjan Das, G. Biswal, Ms. M. Gahlot, S. Mishra, Anukul
H                                        66
                         STATE v. NITY ANAND SA TPA THY                          67
    Ch. Pradhan, Shiv Sagar Tiwari, Ms. K. Sarada Devi, Bhupender Yadav, Ms.           A
    Babita Yadav and Ms. Asha Gopalan Nair for the Appearing parties.

          The following Order of the Court was delivered :

          A large tract of land situate in Village Badagaon, Puri was part of the
    estate of one Manindra Chandra Sinha.                                              ~

          On 24.8.1953, the Orissa State Legislature enacted an Act known as the
    Orissa Estates Abolition Act (hereinafter referred to as "the Act"). The said
    Act came into force with effect from 24th August, 1953. Section 5 of the Act
    provided that all non-agricultural land shall vest in the State. Since the land
    undisputedly was non-agricultural land, the same vested in the State. It appears   C
    that after the death of Manindra Chandra Sinha, his sons executed certain
    leases. The Dy. Collector, Puri by an order dated I 0.8.1957 revoked those
    leases. It may be mentioned that Manindra Chandra Sinha died in the year
    I 922 and by virtue of a will, his sons, namely, Bimal Chandra Sinha, Amresh

>   Chandra Sinha and Brundaban Chandra Sinha succeeded to the aforesaid
    estate upon obtaining a probate. All the sons of Manindra Chandra Sinha
                                                                                       ID
    applied in I 959 for settlement of the said land in their favour under Section
    7 of the Act. Although two of the sons have already died during pendency
    of the application, the Collector by order dated 17.6.1964 settled the aforesaid
    land in favour of the sons of Manindra Chandra Sinha.
                                                                                       E
          Thereafter certain proceedings under the Ceilings Act were initiated
    against the sons of Manindri,t Chandra Sinha but we are not concerned dth
    those proceedings in the present case. Subsequently, the sons of Manindra
    Chandra Sinha by separate registered sale deeds dated 13.6.1983 sold the
    aforesaid land in favour of respondents herein. On 1.1.1992, the Board of          F
    Revenue under Section 38B of the Act exercising suo motu power revoked
    the settlement of the aforesaid land granted in favour of the sons of Man indra
    Chandra Sinha, Inter a/ia, on the ground that the land being Anabadi land,
    had already vested in the State and thus the said land could not have been
    settled in favour of the sons of intermediary. The respondent-transferees
    thereafter filed a petition under Section 226 of the Constitution before the       G
    High Court. The High Court by the impugned order allowed the writ petition
    and set aside the order passed by the Board of Revenue. Aggrieved the State
    of Orissa has filed this appeal by means of special leave petition.

          Learned counsel appearing for the State of Orissa urged that the land
    admittedly being Anabadi land could not have been settled under Section 7          H
    . 68                       SUPREME COURT REPORTS [2003) SUPP. 2 S.C.R.

A of the Act and the view taken by the High Court is erroneous.
           The learned counsel appearing on behalf of the respondents, on the
     other hand, would urge that as in the instant case not only settlement had
     been granted upon making thorough inquiry in this behalf by the competent
     authority, but as such settlement was subject matter of ceiling proceedings
B    which went up to the Board of Revenue, the order of settlement could not
     have been cancelled after a long time. Section 5 and 7 of Orissa Estate
     Abolition Act, 1951 read as under:                                                 {
            "5. Consequences ofvesting ofan estate in the State - Notwithstanding
            anything contained in any other law for the time being in force or in
c           any contract, on the publication of the notification in the Gazette
            under Sub-section (I) of Section 3 or Sub-section ( 1) of Section 3-
            A or from the date of the execution of the agreement under Section
            4, as the case may be the following consequences shall ensue namely:

                 (a) Subject to the subsequent provisions of this Chapter the entire
D                estate including all communal lands and porambokes, other non-
                 raiyati lands, waste lands, trees, orchards, pasture lands, forests,
                 mines and minerals (whether discovered or inclusive of rights in
                 respect of any lease of mines and minerals quarries, rivers and
                 streams tanks and other irrigation works, water channels, fisheries,
E                ferries, hats and bazars, and building or structures together with
                 the land on which they stand shall vest absolutely in the State
                 Government free from all encumbrances and such Intermediary
                 shall cease to have any interest in such estate other than the
                 interests expressly saved by or under the provisions of the Act;

F                Explanation -'Encumbrance' means a mortgage of or a charge on
                 any estate or part thereof and includes any right in land or other
                 immovable property comprised in an estate, but does not includes
                 an intermediary interest or the interest of a raiyat or an under-
                 raiyat.

G                (b) All rents, cesses, royalties and other dues accruing in respect
                 of lands comprised in such estate on or after the date of vesting
                 shall be payable to the State Government and not to the outgoing
                 intermediary and any payment made in contravention of this
                 clause shall not be valid discharge, and all such rents, cesses,
                 royalties and other dues shall be recoverable as arrears of land
H                revenue.
                  STATE v. NITY ANAND SA TPA THY                        69
        Provided that where the date of vesting falls within the period to    A
        which the dues relate only such proportion of the dues shall be
        payable as the period beginning with the said date and ending
        with the period aforesaid bears to the whole of that period:

        Provided further that any part of such dues appropriated by the
        intermediary beyond what may be found due to him in accordance • B
        with the provisions of this clause may be recovered by the State
        Government as arrears of land revenue or by the deduction of,
        the amount from the compensation payable to such Intermediary.

        Provided also that the payment of any amount on account of any ,
        such rents, cesses, royalties and other dues made to the outgoing C
        intermediary in pursuance of the orders of any Court of law shall
        constitute a valid discharge.

        (c - k) xxxxxxxxx"

    7. Certain other lands in khas possession of Intermediaries to be
>   retained by them on payment of rent as raiyats having occupancy
    rights -
                                                                              D

    (I) On and from the date of vesting -

    (a) all lands used for agricultural or horticultural purposes which
    were in khas possession of an intermediary on the date of such vesting;   E
    (b) lands used for agricultural or horticultural purposes and held by
    a temporary lessee or lessees of an Intermediary who owns either as
    Intermediary of in any other capacity less than thirty-three acres of
    land in total extent situated within the State;
                                                                              F
    (c) lands used for agricultural or horticultural purposes and in
    possession of a mortgagee, which immediately before the execution'
    of the mortgage bond were khas possession of such Intermediary,
    shall notwithstanding anything contained in this Act, be deemed to be1
    settled by the State Government with such Intermediary and with all
    the share-holders owning the estate and such Intermediary with all        G
    the share-holders, shall be entitle to retain possession thereof and
    hold them as raiyats under the State Government having occupancy
    rights in respect of such lands subject to the payment of such. fair
    and equitable rent as may be determined by the Collector in the
    prescribed manner;
                                                                              H
    70                         SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A           xxx                              xxx                          xxx"

          Once a Notification under Section 3 of the Act is issued, the lands of
    the intermediaries vested in the State of Orissa. Section 5 provides for the
    consequences of the vesting of an estate in the State in terms whereof all the
    rights of the nature specified therein shall stand transferred to the State. As
B   vesting takes place free from all encumbrances, the intermediaries ceased to
    have any rights thereunder. The plot in question being admittedly 'Anabadi'
    land must be deemed to have vested in the State Government subject to any
    right which the intermediaries could have claimed thereupon. Under Section
    5 of the Act, the intermediaries although might not have physically
C   dispossessed, but they would be deemed to go out of possession and it was
    open to the State to exercise its right of possession.

           Section 7 of the Act provides for an exception. It, thus, must be construed
    strictly. In terms of the afore-mentioned provision, only the lands specified
    therein can be retained by the intermediaries as a raiyat but such a right can
D   be exercised only in the event an order is passed by the appropriate authority
    on an application filed in this behalf. In terms of sub-section (1) of Section
    7, only the land used for cultivation and horticultural purposes which were
    in khas possession of an intermediary on the date of such vesting would be
    conceived. The expression 'khas possession' has been defined in Section 2
    G) which too means 'land used for agricultural or horticultural purposes'.
E   The possession of an intermediary of any land used for agricultural or
    horticultural purposes means the possession of such intermediary by cultivating
    such land or carrying horticultural operations thereon himself with his .own
    stock or by his own servants or by hired labour or with hired stock. A bare
    perusal of the afore-mentioned provision show that for the purpose of taking
F   benefit of the provisions of Section 7(1) (a) of the Act, the intermediary must
    be in cultivating possession of the said land either by himself, with his own
    stock or by his own servants or by hired labour or with hired stock. The
    nature and character of the land being non-agricultural, the same evidently
    was not in cultivating possession of the intermediaries and, thus, an application
    for settlement of such land by the intermediaries purported to be in terms of
G   Section 7 of the Act was not maintainable. Furthermore, the land being not
    used either for cultivation or for horticulture purposes on the date of vesting
    did not attract the provisions of clause (a) of sub-section (I) of Section 7.

         For the reasons afore-mentioned, it must be held that the settlement
H   made in favour of ex-intermediary was bad in law. Furthermore, as admittedly
                    STATE v. NITY ANAND SATPATHY                        71
two of the applicants being sons of the intermediary died in the years 1961   A
and 1963, no settlement could have been made in their favour. The order of
settlement clearly depicts a total non-application of mind on the legal
principles.

     We, accordingly, set aside the order and judgment under challenge. lll
The appeal is allowed. There shall be no order as to rost~.             f
R.P.                                                      Appeal allowed.