Sub-Lessee Can't Acquire Status Of Tenure Holder Under UP Land Ceiling Act If Sub-Lease Was Contrary To Conditions: Supreme Court

A Bench comprising Justices S. Abdul Nazeer and Krishna Murari dismissed the appeals filed challenging the order of the Uttarakhand High Court, which refused to extend the benefits of independent tenure holder to sub-lessees as the subletting itself was in violation of the pre-conditions stipulated in the Government Lease Deed.

Factual Background

Harikishan Lal (Respondent No. 2) inherited the lease hold rights of the land granted to Lala Khushi Ram by the Secretary of State of India vide lease deed dated 25.08.1920 under the Government Grants Act, 1895. A sub-lease for land admeasuring 2.49 acres for agricultural purposes was executed by Harikishan in favour of the appellants. The Prescribed Authority, Kashipur (Respondent No. 1) issued a notice under Section 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 ("Ceiling Act") to Harikishan to declare certain areas of land held by him as surplus. By order dated 28.07.1978, the Prescribed Authority declared the same. The land sub-let to the appellants formed a part of the identified surplus land. Upon knowledge of the same, the appellants filed an application before the Prescribed Authority under Section 11(2) of the Ceiling Act, 1960, which was rejected. The High Court allowed the Writ Petition filed by the appellants and remanded the matter back to the Prescribed Authority. Again, the Authority rejected the application on the ground that the appellant's possession of the concerned land was not reflected in revenue records and the pre-conditions laid down in the lease agreement dated 25.08.1920 were not followed before subletting the concerned land to the appellants. The order was assailed before the Additional District Judge, who dismissed the same. Subsequently, the appellants approached the High Court. During the pendency of the proceedings before the High Court, State of Uttaranchal came into existence and as the land fell in the territorial jurisdiction of the High Court of Uttaranchal the Writ Petition was transferred and later dismissed for want of prosecution. Restoration application seeking recall of order was also dismissed. Ultimately, the Supreme Court restored the Writ Petitions before the Uttarakhand High Court, which finally dismissed them. Though the High Court accepted the appellants to be tenure holder under Section 9(3) of the Ceiling Act, 1960, it refused to extend benefit to a sub-lessee whose sub-lease was in violation of the conditions prescribed in Clause 9 of the Lease deed.

Contentions raised by the appellants

Referring to the definition of the term 'tenure holder' in Section 3(17) and definition of 'holding' in Section 3(9) of the Ceiling Act, the Counsel appearing on behalf of the appellants argued they were 'tenure holders' as per Section 3(17). It was further averred that as independent tenure holders they were eligible for assessment of ceiling area, independent from that of Harikishan. The Counsel contended that the twin condition in Clause 9 of the Lease Deed was not applicable for subletting for agricultural purposes.

Contentions raised by the respondents

The Counsel appearing for the Respondents controverted the argument of the appellants that they had acquired the rights of independent tenure by submitting that the appellants had failed to take into consideration Section 5 of the Ceiling Act, which puts the burden on the appellants to show that they were independent tenure holders. It was contended that they had failed to discharge the burden of proof. The Counsel for Harikishan argued that since Clause 9 of the lease deed specifically excluded sub-leases made in ordinary course of agriculture, independent tenure rights cannot be created by sub-leases executed in ordinary course of agriculture.

Analysis of the Supreme Court

At the outset the Court observed that -

"The very purpose behind enactment of the Ceiling Act is to prescribe a ceiling limit on the area of land held by a 'tenure holder' for the purpose of securing the interest of the community at large to ensure increased agricultural production and to provide land for landless agricultural labourers with a view to have equitable distribution of land."

Referring to Clause 9 of the Lease Deed dated 25.08.1920, the Court noted that the lessee was permitted to transfer the land only upon the fulfilment of the conditions enumerated therein. On perusal of the terms of the sub-lease, the Court observed that it specifies that if a sub-lessee intended to purchase the full rights of the original lessee and become an independent tenure holder, they had to do so in consonance with Clause 9 of the Lease Deed within a period of 5 years from the date of sub-lease and on the payment as provided in Clause 5 of the sub-lease. Therefore, the Court was of the view that the conditions laid down in both Clause 9 of the Lease Deed and Clause 5 of the sub-lease deed had to be met by the appellants in order to be identified as independent tenure holders. It was further noted that though as per the terms of the Lease Deed, the land could be sublet for agricultural purposes, but the sub-lessees would not become independent tenure holders.

"Though, the conditions of grant allowed sub-lease of the land in the ordinary course of agriculture but contrary to the terms of grant, the sub-lessee can claim no independent tenancy right so as to frustrate the terms and tenure of the grant, as the sub-lease executed for ordinary course of agriculture cannot be treated as transfer for want of compliance of the conditions enumerated in the Clause itself. Thus, the appellants in their capacity as sub-lessee shall not acquire the status of an independent tenure holder."

Moreover, the amendment of Sections 2 and 3 of the Government Grants Act inserted by U.P. Amendment Act 13 of 1960 with retrospective effect postulated that the rights and obligations between the Government and the original lessee would be regulated by terms of the grant.

Placing reliance on Escorts Farms Ltd., Previously Known As M/S. Escorts Farms (Ramgarh) Ltd. v. The Commissioner, Kumaon Division, Nainital, U.P. And Ors. (2004) 4 SCC 281, the Court held that the original lessee had no right to transfer the land without fulfilling the conditions stipulated in Clause 9 of the Lease Deed.

"Thus, the appellant being a sub-lessee continues to be an ostensible holder of land and the government grantee, the Respondent No. 2, to be the real holder and the ceiling authorities as well as the High Court have rightly dismissed the claim of the appellant."

Case Name: Hardev Singh v. Prescribed Authority, Kashipur And Anr.

Citation: 2022 LiveLaw (SC) 44

Case No. and Date: Civil Appeal No. 2295 of 2010 | 10 Jan 2022

Corum: Justices S. Abdul Nazeer and Krishna Murari

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