Calcutta High Court
Special Secretary, Land And Land And ... vs State Bank Of India And Ors. on 12 April, 1988
Equivalent citations: AIR1989CAL40, AIR 1989 CALCUTTA 40
JUDGMENT Bimalchandra Basak, J.
1. This appeal is directed against a judgment and order passed by the learned single Judge of this Court whereby the writ petition filed by the State Bank of India that is the Respondent herein, was allowed and the rule was made absolute.
FACTS:
2. The facts of this case are as follows:--One David Plait Dunderdale executed a Will whereby he appointed writ petitioner the State Bank of India (hereinafter referred to as State Bank) as executor and trustee. Dunderdale died on 7th October, 1964 and the State Bank of India applied for and obtained probate of the said Will from this Court on 6th August, 1965. The subject-matter of this writ petition is premises No. 350, Netaji Subhas Chandra Bose Road, Tollygunge, Calcutta According to the petitioner, it is a two storeyed building with out-houses which are also dwelling units and have total land area to the extent of, 4208.04 square metres. The covered area of the building and out-houses are to the extent of 392.14 square metre. The problem arises in view of the enforcement of Urban Land (Ceiling and Regulation) Act, 1976 hereinafter referred to as the "Ceiling Act") which came into force so far as the State of West Bengal is concerned, on 17th February, 1976. The admitted position is that the said premises falls within the mischief of the said Act unless it is exempted under Section 19, Ceiling. Act. The contention of the writ petitioner is that it is exempted in view of the provisions of Section 19 of the said Act. We may point out that so far as the State of West Bengal is concerned, the said Act came into force on 17th February, 1976. The relevant provisions of the said Act are set out hereinbelow :--
Section 2(a) "appointed day" means-
(i) in relation to any state to which this Act applies in the first instance, the date of introduction of the Urban Land (Ceiling and Regulation) Bill, 1976 in Parliament; and
(ii) in relation to any State which adopts this Act under Clause (1) of Article 252 of the Constitution, the date of such adoption.
(c) "Ceiling limit" means the ceiling limit specified in Section 4.
(1) "to hold" with its grammatical variations, in relation to any vacant land, means-
(i) to own such land; or
(ii) to possess such land as owner or as tenant or as mortgagee or under an irrevocable power of attorney or under a hire-purchase agreement or partly in one of the said capacities and partly in any other of the said capacity or capacities.
Explanation:-- Where the same vacant land is held by one person in one capacity and by another person in another capacity, then, for the purpose of this Act, such land shall be deemed to be held by both such persons.
(q) "vacant land" means land, not being land mainly used for the purpose of agriculture, in an urban agglomeration, but does not include-
(i) Land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated;
(ii) in an area where there are building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and
(iii) in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day and the land appurtenant to such building:
Provided that where any person ordinarily keeps his cattle, other than for the purpose of daily farming or for the purpose of breeding of livestock, on any land situated in a village within an urban agglomeration (described as a village in the revenue records), then, sp much extent of the land as has been ordinarily used for the keeping of such cattle immediately before the appointed day shall not be deemed to be vacant land for the purposes of this clause.
Section 3. Persons not entitled to hold vacant land in excess of the ceiling limit.
Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under Sub-section (2) of Section 1.
Section 4. Ceiling limit:
(1) Subject to the other provisions of this section in the case of every person, the ceiling limit shall be,--
(a) where the vacant land is situated in an urban agglomeration falling within category A specified in Schedule 1, five hundred square metres;
(b) where such land is situated in an urban agglomeration falling within category B specified in Schedule 1, one thousand square metres;
(c) where such land is situated in an urban agglomeration falling within category C specified in Schedule 1, one thousand five hundred square metres;
(d) where such land is situated in an urban agglomeration falling within category D specified in Schedule 1, two thousand square metres;
(2) where any person holds vacant land situated in two or more categories of urban agglomeration specified in Schedule 1, then, for the purpose of calculating the extent of vacant land held by him,--
(a) one square metre of vacant land situated in an urban agglomeration falling within category A shall be deemed to be equal to two square metres of vacant land situated in an urban agglomeration falling within category B, three square metres of vacant land situated in an urban agglomeration falling within category C and four square metres of vacant land situated in an urban agglomeration falling within category D;
(b) one square metre of vacant land situated in an urban agglomeration falling within category B shall be deemed to be equal to one and one-half square metres of vacant land situated in an urban agglomeration falling within category C and two square metres of vacant land situated in an urban agglomeration falling within category D; and
(c) one square metre of vacant land situated in an urban agglomeration falling within category C shall be deemed to be equal to one and one-third square metres of vacant land situated in an urban agglomeration falling within category D. (3) Notwithstanding anything contained in Sub-section (1), where in respect of any vacant land any scheme for group housing has been sanctioned by an authority competent in this behalf immediately before the commencement of this Act, then the person holding such vacant land at such commencement shall be entitled to continue to hold such land for the purpose of group housing;
Provided that not more than one dwelling unit in the group housing shall be owned by one single person;
Provided further that the extent of vacant land which such person shall be entitled to hold shall in no case exceed-
(a) the extent required under any building regulations governing such group housing; or
(b) the extent calculated by multiplying the number of dwelling-units in the group housing and the appropriate ceiling limit referred to in Sub-section (1), whichever is less.
Section 5. Transfer of vacant land.
(1) In any State to which this Act applies in the first instance, where any person who had vacant land in excess of the ceiling limit at any lime during the period commencing on the appointed day and ending with the commencement of this Act, has transferred such land or part thereof by way of sale, mortgage, gift, lease or otherwise the extent of the land so transferred shall also be taken into account in calculating the extent of vacant land held by such person and the excess vacant land in relation to such person shall, for the purpose of this chapter, be selected out of the vacant land held by him after such transfer and in case the entire excess vacant land cannot be so selected, the balance, or where no vacant land is held by him after the transfer, the entire excess vacant land, shall be selected out of the vacant land by the transferee;
Provided that where such person has transferred his vacant land to more than one person, the balance, or, as the case may be, the entire excess vacant land aforesaid, shall be selected out of the vacant land held by each of the transferees in the same proportion as the area of the vacant land transferred to him bears to the total area of the land transferred to all the transferees.
(2) Where any excess vacant land is selected out of the vacant land transferred under Sub-section (1), the transfer of the excess vacant land so selected shall be deemed to be null and void.
(3) In any State to which this Act applies in the first instance and in any State which adopts this Act under Clause (1) of Article 252 of the Constitution no person holding vacant land in excess of the ceiling limit immediately before the commencement of this Act shall transfer any such land or part thereof by way of sale, mortgage, gift, lease or otherwise until he has furnished a statement under Section 6 and a notification regarding the excess vacant land held by him has been published under Sub-section (1) of Section 10; and any such transfer made in contravention of this provision shall be deemed to be null and void."
Section 6. Person holding vacant land in excess of ceiling limit to file statement.
(1) Every person holding vacant land in excess of the ceiling limit at the commencement of this Act shall, within such period as may be prescribed, file a statement before the competent authority having jurisdiction specifying the location, extent, value and such other particulars as may be prescribed of all vacant lands and of any other land on which there is a building, whether or not with a dwelling-unit therein, held by him (including the nature of his right, title or interest therein) and also specifying t he vacant lands within the ceiling limit which he desires to retain;
Provided that in relation to any State to which this Act applies in the first instance the provisions of this sub-section shall have effect as if for the words "every person holding vacant land in excess of the ceiling limit at the commencement of this Act" the words, figures and letters, "every person who held vacant land in excess of the ceiling limit on or after the 17th day of February, 1975 and before the commencement of this Act and every person holding vacant land in excess of the ceiling limit at such commencement" has been substituted.
Section 7 provides for Filing of Statement in case where vacant land held by a person is situated within the jurisdiction of two or more competent authorities.
Section 8 provides for preparation of draft statement as regards vacant land held in excess of ceiling limit.
Section 9 deals with final Statement.
Section 10 provides for acquisition of vacant land in excess of ceiling limit.
"S. 19. Chapter not to apply to certain vacant lands, (1) Subject to the provisions of Sub-section (2), nothing in this chapter shall apply to any vacant land held by-
(i) the Central Government or any State Government or any local authority or any Corporation established by or under a Central or provincial or State Act or any Government company as defined in Section 617, Companies Act, 1956(1 of 1956);
(ii) any military, naval or air force institution;
(iii) any bank."
Explanation:-- In this clause "bank" means any banking company as defined in Clause (c) of Section 5, Banking Regulation Act, 1949 (10 of 1949), and includes,
(a) the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934);
(c) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);
(d) a corresponding new bank constituted under Section 3, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);
(e) the Industrial Finance Corporation of India, established under the Industrial Finance Corporation Act, 1948 (15 of 1948), the Life Insurance Corporation of India, established under the Life Insurance Corporation Act, 1956 (31 of 1956), the Unit Trust of India, established under the. Unit Trust of India Act, 1963 (52 of 1963), the Industrial Development Bank of India Act, 1964 (18 of 1964), the Industrial Credit and Investment Corporation of India, the Industrial Reconstruction Corporation of India and any other financial institution which the Central Government or the State Government concerned may, by notification in the Official Gazette, specify in this behalf;
(iv) any public charitable or religious trust (including wakf) and required and used for any public charitable or religious purposes :
Provided that the exemption under this clause shall apply only so long as such land continues to be required and used for such purposes by such trust;
(v) any co-operative society, being a land mortgage bank or a housing co-operative society, registered or deemed to be registered under any. law relating to co-operative societies for the time being in force :
Provided that the exemption under this clause, in relation to a land mortgage bank shall not apply to any vacant land held by it otherwise than in satisfaction of its dues;
(vi) any such educational, cultural, technical or scientific institution or club (not being a corporation established by or under a Central or Provincial or State Act referred to in Clause (i) or a society referred to in Clause (vii) as may be approved for the purposes of this clause by the State Government by general or special order, on application made to it in this behalf by such institution or club or otherwise:
Provided that no approval under this clause shall be accorded by the State Government unless that Government is satisfied that it is necessary so to do having regard to the nature and scope of the activities of the institution or club concerned, the extent of the vacant land required bona fide for the purposes of such institution or club and other relevant factors;
(vii) any society registered under the Societies Registration Act, 1860(21 of 1860), or under any other corresponding law for the time being in force and used for any nonprofit and non-commercial purpose;
(viii) a foreign State for the purpose of its diplomatic and consular missions or for such other official purposes as may be approved by the Central Government or for the residence of the members of the said missions;
(ix) the United Nations and its specialized agencies for any official purpose or for the residence of the members of their staff;
(x) any international organisation for any official purpose or for the residence of the members of the staff of such organisation;
Provided that the exemption under this clause shall apply only if there is an agreement between the Government of India and such international organisation that such land shall be so exempted.
2. The provisions of Sub-section (1) shall not be construed as granting any exemption in favour of any person other than an authority, institution or organisation specified in Sub-section (1) who possesses any vacant land which is owned by such authority, institution or organisation or who owns any vacant land which is in the possession of such authority, institution or organisation :
Provided that where any vacant land which is in the possession of such authority, institution or organisation, but owned by any other person, is declared as excess vacant land under this chapter, such authority, institution or organisation shall, notwithstanding anything contained in any of the foregoing provisions of this chapter, continue to possess such land under the State Government on the same terms and conditions subject to which it possessed such land immediately before such declaration.
Explanation:-- For the purpose of this sub-section, the expression "to possess vacant land" means to possess such land either as tenant or as mortgagee or under a hire-purchase agreement or under an irrevocable power of attorney or partly in the said capacities and partly in any other of the said capacity or capacities.
"S. 20. Power to exempt.
(1) Notwithstanding anything contained in any of the foregoing provisions of this chapter.-
(a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do that Government may, by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this chapter;
(b) where any person holds vacant land in excess of the ceiling' limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this chapter would cause undue hardship to such person, that Government may, by order, exempt, subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this chapter;
Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing.
(2) If at any time the State Government is satisfied that any of the conditions subject to which any exemption under Clause (a) or Clause (b) of Sub-section (1) is granted is not complied with by any person, it shall be competent for the State Government to withdraw, by order, such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of this chapter shall apply accordingly."
3. It was argued before the learned single Judge that upon interpretation of the provisions of the said Act, particularly Section 19 thereof, the expression 'hold' in Section 3 and in Section 19, Ceiling Act, does not indicate any contrary intention and as such the State Bank of India ought to be exempted from the operation of the Act since holding of any vacant land by a trustee has not been included in a separate category. It was further contended that the land or property held by the State Bank of India as a trustee is so held, as a owner thereof and, therefore, Section 3 does not have any manner of application to any vacant Land held by the State Bank of India qua trustee.
4. On behalf of the State it was submitted as follows : The State Bank of India has been appointed as an executor and trustee under the Will The legal role of the State Bank of India as an executor and trustee is on behalf of the estate left behind by a deceased for distribution of assets to the beneficiaries. The legal ownership did not vest on the petitioner-
Bank. It was merely functioning as an executor of a Will and not or as a Bank as that of a Banking Institution as contemplated under Section 24 of the Act of 1976. The exemption granted under Section 19 is applicable to the land when the State Bank of India held the land as owner and not on behalf of certain other legatees and as such the bank was not entitled to obtain the benefit of the exemption under Section 19. The Bank had no right over the usufruct, but is only entitled to a remuneration for acting as executor of such estate of a deceased person under the Will and is not entitled to protection or benefit under Section 19 of the Act.
In any event, it was submitted that under Section 211, Succession Act, the estate vests in executor and administrator for the purpose of representation. The right to represent the estate for such purpose is not the same as to right with the beneficial interest and the petitioner. State Bank of India, has as such only a limited interest in the property.
5. The learned Judge held as follows : --"Turning on the principal question, as regards exemption under Section 19 of the Act of 1976 in the normal course of events, holding of any vacant land as owner thereof in so far as the Bank is concerned would not pose any difficulty. But the question arises as to whether Section 19 would have any play and exclude the Bank when the property is being held as an executor trustee as in the case under consideration, Section 2(1)(ii) at this juncture comes in aid and it clarifies the legislative intent since the statute provides that 'to hold' means, "to possess such land as owner or as tenant or as the mortgagee or under an irrevocable power of attorney or under a hire-purchase agreement." Admittedly the Bank is holding the property as an executor. "Executor" is a legal representative and the property of a trustee vests on to the executor immediately upon the death of the testator. The property upon the death of the testator, in my view, cannot remain in medio, but must vest into somebody. It is at this juncture and prior to the actual disbursement of the property that the respondent-authority claimed its application in so far as the petitioner-Bank is concerned. In the event, the property cannot remain in medio, the ownership ought to vest into somebody and in this case into the petitioner-Bank. The submission of the learned Additional Advocate-General that under Section 211, Succession Act, that the estate vest in the executor and administrator for the purpose of representation, only and the right to represent for such purpose is not the same as the right to hold the property with beneficial interest cannot, in my view, be accepted. The statute recognises the right of even a tenant in the matter of holding of such vacant land or that of a mortgagee or even under a hire-purchase agreement. The statute thus makes it clear that whosoever holds vacant land either in the capacity of a true owner or in the capacity of tenant or mortgagee, shall come within the four-corners of Section 3 with the exception as mentioned in Section 19. The exemption granted is not restrictive in nature but absolute. The language of Section 19 makes it clear and categorical that Chapter-III would not have any application to any vacant land held by any Bank. There is neither any restriction as noted above nor any condition attached thereto and as such, in my view, whether as owner or as an executor even though not true owner, the Bank can claim exemption from the applicability of the provisions of the Act of 1976. An attempt on the part of the respondent-authority was made to suggest that in the event the Court allows exemption so far as the Bank is concerned in regard to the applicability of this Act, then it would mean and imply that in order to avoid the applicability of the Act of 1976 owners of land would appoint the Bank as an executor and thereby retain the vacant land contrary to the legislative intent. In my opinion, the said contention also has no force since avoidance in future does not and cannot arise in regard to the applicability of the provisions of the Act of 1976."
6. Being aggrieved by the same, the State and its Officers have preferred this appeal.
ARGUMENTS :
7. To appreciate the contentions raised in support of the writ petition, we called upon the writ petitioners to make their submissions fitst in support of the writ petition and the judgment. Mr. Biswarup Gupta, learned Advocate appearing for the State Bank of India has drawn our attention to various provisions of the Ceiling Act, Succession Act, State Bank of India Act and Banking Regulations Act which we have quoted above. On the question whether at the time of the Ceiling Act coming into force so far as the Dunderdale's estate is concerned, State Bank which was appointed both as executor and trustee under the Will was acting as a trustee as the administration of the estate as executor was completed. In this context he has drawn our attention to the affidavit of Rabindra Nath Bhattacharya affirmed on 15th of February, 1988 pursuant to our directions. In the said affidavit it is, inter alia, stated as follows : --
"4. The State Bank of India assumed the Office as appointed by the said Will and applied for probate before this Hon'ble Court and such probate was granted on or about August 6,1965 and respondent 1 craves leave to refer to the said probate at the time of hearing.
5. A copy of the affidavit of assets affirmed on 28th July, 1965 is annexed hereto marked "A".
6. The State Bank of India duly paid the estate duty due on the said estate of the said deceased as assessed. A certificate of the Controller of Estate Duty dated 21st June, 1965 showing that no estate duty in respect of the property passing on the death of the said deceased was due, is annexed hereto marked "B". Also annexed hereto marked "C" is a letter dated 6th May, 1965 from the State Bank of India to the Advocates-on-records Sandersons and Morgans enclosing cheque for the payment of Rs. 86,702.75 p. pursuant to demand by the Assistant Controller, Estate Duty.
7. So far as the payment of the pecuniary legacies enjoined by the said Will, the same were paid as stated hereinbelow : --
"Mrs. Marry Anne Phillips nee Von Rot off paid 1.000 on 14-2-1967 through our London Office from the assets thereat.
Sri Ram Rikh Singh paid on 31-1-1966 for Rs. 5,000/-. Sri Kartick Nayak paid on 2-2-1966 for Rs. 10,000/-. Sri Russi Nayak paid on 8-2-1966 for Rs. 3,000/-." The aforesaid payments were duly intimated to Sandersons and Morgans, Advocates-on-records of the State Bank of India by letter dated February 4. 1988, a copy of which is annexed hereto marked 'D'. Copies of receipts and/or discharge given by the legatees are annexed and also included in Annexure 'D' hereof.
8. The funeral expenses of the said deceased were duly paid and so were his tax liabilities under Income-tax Act and Wealth-tax Act. His funeral expenses were duly paid to Lawrence and Company as will appear from the said affidavit of assets in Annexure 'A' thereto as also his other debts referred to therein. There were no other debts of the deceased to be discharged and no claims apart from what is stated above were received by the State Bank of India."
8. In this context we may also refer to the relevant portions of the Will of Dunderdale which provides as follows : --
"1. I bequeath the following pecuniary legacies free of all duties: --
(a) To Mary Anne Pillips (nee von Rotoff) residing at No. 19, Royd Street, Calcutta, the sum of 1,000/- (Pounds one thousand sterling) or the equivalent in Indian Currency whichever he prefers.
(b) To Ram Rikh Singh of 14 Raidaspuri, Post Office and District Muzaffarnagar, Uttar Pradesh, India the sum of Rs. 5,000/- (Rupees five thousand).
(c) To Kartick Nayak of village Kulassar, Post Office Rai Sunakhela, District Puri, India the sum of. Rs. 10,000/- (Rupees ten thousand).
10. To Russi Nayak of village Kulassar aforesaid the sum of Rs. 3,000/- (Rupees three thousand).
2. I appoint the State Bank of India (hereinafter called 'the Bank') to be Executor of this my Will and I direct the Bank after paying the said legacies and my just debts, funeral and testamentary expenses to hold all the residue of my estate movable and immovable and wheresoever situate (hereinafter called 'my residuary estate') upon trust to sell call in and convert my residuary estate into money with full power to postpone such sale calling in and conversion for such length of time as the Bank shall think fit and upon trust to invest the proceeds of such sale calling in and conversion in such investments as to the Bank may seem fit and proper (the Bank being hereby expressly absolved from all liability for any loss resulting from any investment made by it) and to hold such investments and all parts of my residuary estate as shall for the time being remain unsold or unconverted upon trust to pay the net income of my residuary estate to Bijay Pal Singh son of the said Ram Rikh Singh for his life and after the death of the said Bijay Pal Singh upon trust as to both the capital and income of my residuary estate for the issue of the said Bijay Pal Singh and equally between them if more than one or if he shall die without issue (whether before or after my death) upon trust to pay such net income to the said Kartick Nayak and after the death of the said Kartick Nayak upon trust as to both the capital and income of my residuary estate for the issue (including any adopted child) of the said Kartick Nayak and equally between them if more than one."
9. Accordingly he has submitted that the function of the bank as Executor has come to an end as the administration of the estate as Executor was complete and the Bank had started to function as trustee when the Ceiling Act came into operatioa In this connection he has drawn our attention to Chhatra Kumar Devi v. Mohan Bikram Shah, 58 Ind App 279 (page297): (AIR 1931 PC 196 page 202); W. O. Holdsworth v. State of Uttar Pradesh, and (Kadiyala) Venkata Subarna v. (Katreddi) Ramayya, AIR 1932 PC 92.
10. On the merits he has repeated his submissions made before the trial Court and relied on the reasoning of the learned trial Judge. In this context, he has submitted further that the question of referring to the preamble of the Ceiling Act or any other extraneous evidence does not arise in the present case. The language of the Act is clear. The definition of 'holding' is given and the bank is the only person who was holding the property at the relevant time. This clearly comes within the scope of the exemption under Section 19, Ceiling Act. In this connection he has also drawn our attention to Manohar Lal v. State of Punjab, ; Attorney General v. HRH Prince Ernest Augustus of Hanover, (1957) 1 All ER 49, 62; State of Gujarat v. Parshottamdas Ramdas Patel, . So far as the validity of the Act is concerned, he had drawn our attention to Maharao Saheb Shri Bhim Singhji v. Union of India, and Maharao Sahib Bhim Singhji v. Union of India, .
11. Mr. Bhaskar Gupta, learned Advocate appearing for one of the purchasers admitted that the properties held by private trustees are not exempted. He has submitted that the holding of properties is part of carrying out the statutory duties of the Banks. It is to protect the carrying out of the statutory activities of the Banks that the exemption has been granted. In this context he has drawn our attention to the relevant provisions of the State Bank of India Act and Banking Regulation Act.
12. Mr. Roy Chowdhury, learned Advocate appearing on behalf of the State has drawn our attention to the supplementary affidavit and submitted that at the relevant time the administration was not completed. In this connection he has drawn our attention to Section 211, Succession Act, and AIR 1938 Cal 714, (Kulwant Bewa v. Karamchand Sain) corresponding to ILR (1939) 1 Cal 21 at pages 33 and 34. He has submitted that regarding the holding of property no restricted interpretation is to be given. In this connection he had drawn our attention to Ummachikannummal Mohammed Pathummal v. Bhargavan Rajan, . He has submitted that restricted interpretation to be given to the relevant portions of the section. So far as the position pf executor is concerned, he has submitted that the executor as such cannot get more right than the deceased. He has submitted that had the testator been alive, he could not get any such exemption. In this connection he has drawn our attention to Behary Lall Sandyal v. Juggo Mohan Gossain, (1879) ILR 4 Cal 1 at page 5. He has also drawn our attention to various provisions of Wealth tax Act and Income-tax Act as to the meaning of the expression 'holding' or 'owner'. He has next submitted that the trustee is not a full owner of the estate; only a restricted power is given to him. In this connection he has drawn our attention to Ss. 36,47 and 48, Trusts Act. On the question of "legal ownership" and "beneficial ownership", he has drawn our attention to Ramabai v. Raghunath, . On the question of the Principles of Interpretation of Statute, he has drawn our attention to Mohindar Singh v. Ramindar Singh, AIR 1944 PC 83 (at page 86) and A. C. Mills Ltd v. Commr. of I.T. West Bengal, AIR 1955 SC 661 .
13. Mr. Dutt, the learned Advocte, whom we had requested to appear to assist the Court, places the relevant sections of the Ceiling Act and submits that the intention of the Legislature was to give relief to the Bank using land not only for its own benefit but also for others. Mr. Biswarup Gupta, learned Counsel in his reply has submitted that it is merely fortuitous and not intended that the private trust held by the private person or person is not to be entitled to exemption. Here the 15th March, 1964 is the date of the, Will and the 7th October, 1964 is the date of death of Dunderdale. It is not possible for any one to judge the intention of the testator. Further he has said that nobody else can be called to be the owner of the land.
14. We shall first report to the decisions cited before us. So far as the legal position of the trustees and the executors are concerned following decisions were cited
15. In the case of W. O. Holdsworth v.
State of Uttar Pradesh, the Supreme Court held as follows : --
"Whatever be the position in English Law, the Indian Trusts Act, 1882 (11 of 1882) is clear and categoric oh this point. Section 3 of that Act defines a trust as an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner; the person who accepts the confidence is called the 'trustee':
the person for whose benefit the confidence is 'accepted is called the 'beneficiary': "the beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust property; the subject-matter of the trust is called "trust property" or "trust money". (Para 22) "These definitions emphasize that the trustee is the owner of the trust property and the beneficiary only has a right against the, trustee as owner of the trust property. The trustee is thus the legal owner of the trust property and the property vests in him as such. He no doubt holds the trust property for the benefit of the beneficiaries but he does not hold it on their behalf. The expressions "for the benefit of" and "on behalf of" are not synonymous with each other. They convey different meanings.
The former connotes a benefit which is enjoyed by another thus bringing in a relationship as between a trustee and a beneficiary or cestui que trust, the latter connotes an agency which brings about a relationship as between principal and agent between the parties one of whom is acting on behalf of another. Section 11(1) therefore can only come into operation where the land from which agricultural income is derived is held by such common manager, receiver, administrator or the like on behalf of, in other words as agent or representative of persons jointly interested in such land or in the agricultural income derived therefrom.
Even though such persons were the beneficiaries cestui que trust under a deed of tryst, they would not be comprised within the category of persons on whose behalf such land is held by the trustees and the trustees would not be included in the description of common manager, receiver, administrator or the like so as to attract the operation of Section 11. Trustees do not hold the land from which agricultural income is derived on behalf of the beneficiaries but they hold it in their own right though for the benefit of the beneficiaries." (Para 23) "The beneficiaries are also not necessarily persons who are jointly interested in such land or in the agricultural income derived therefrom. The term "jointly interested" is well known in law and predicates an undivided interest in the land Or in the agricultural income derived therefrom as distinguished from a separate or an undivided interest therein. If on a true reading of the provisions of the deed of trust the interest which is created in the beneficiaries is a separate or undivided interest of each of the beneficiaries in the land or in the agricultural income derived therefrom, merely because they have a common interest therein, that cannot make that interest a joint interest in the land or in the agricultural income derived therefrom.
The words "jointly interested" have got to be understood in their legal sense and having been used in a statute are not capable of being understood in a popular sense as meaning a common interest or an interest enjoyed by person in common with another or others." (Para 24)
16. In the case of Bholanath Shaw v. Badrinath Shaw , it was held as follows : --
"The legal position of an executor under a Will cannot be equated to that of a trustee. The vesting of property in an executor is only for the purpose of representing the estate of the deceased person. No such qualification can be attached to the office of trustee or shebait as they are not the legal representatives of the settlor of the trust.
The trustee is the legal owner of the trust property. A shebait is the legal owner of the shebait right. The trusteeship and the shebaitship are properties even when no, emoluments are attached to them. Their office and properties are blended together.
17. In the case of Sm. Subashini Karuri v. Wealth-tax Officer, District 1(2) 'D' Ward, Calcutta, it was held as follows: --
"Lastly, I come to the question raised in the assessment order, namely, that the petitioners are holding property as executors and not as trustees. What is stated is that under the Will they must hold the property until the death of all the sons and the grandsons living at the time of the death of the testator and/or the period of minority of any of them and consequently until the time for distribution arrives, the petitioners are holding as executors and not as trustees. Now, if this contention is correct and the petitioners are holding as executors then they do not come within the mischief of Section 21 because Section 21 does not apply to executors. In my opinion, respondent 1 is in error in considering that the petitioners hold the property as executors until the period of distribution has arrived. It is a mistake to think that an executor necessarily remains an executor until he hands over the property to the person ultimately entitled to it. The administration of an estate in the hands of an executor is at an end as soon as the debts have been paid and the legacies have been assented to have been paid. Lewis in his book on "Trust" says :
"When the funeral and testamentary expenses, debts and legacies have been satisfied, and the surplus has been invested upon the trust of the Will, the executor then assumes the character and becomes a trustee in the proper sense."
Therefore, when the proper executorial function has been completed the executor continues to hold only as a trustee for the execution of the trust of the Will. Reference may be made to the case of Gour Chandra Das v. Monmohini Dasi, 25 Cal WN 332 : AIR 1921 Cal 142. The facts in the case were as follows : S by his will appointed A and B as his executors as well as shebaits of the idol in whose favour the Will created a trust in respect of the whole of his property, Greaves, J. said as follows : --
"The whole of the estate of Sambhu was created a trust property for the idol Saligram and as soon as debts and legacies were paid and the funeral expenses were paid the executors would hold the property upon the trusts of the Will and there would be no property administered by the executors which would pass to any administratrix de bonis non-appointed by the Probate Court" (Para 19) The sole purpose of the grant of administration of an estate is the collection of assets, payment of necessary expenses and debts, and the disposition of the assets, in case of testamentary succession, by the payment of legacies and carrying out the directions of the Will with regard to the assets and in the case of intestacy by distribution of the assets among the legal heirs. As long as any one or more of these things remains to be done in respect of the whole or any part of the assets of the estate, it is said to be not fully administered. When the estate is fully administered, the executor can get a discharge by an application to the High Court under Section 301, Succession Act. Whether there is an order of discharge or not is immaterial. If the estate has been fully administered, the administration must be deemed to have come to an end. In Taran Singh Hazari v. Ram Ratan Tewari, (1904) ILR 31 Cal 89, one Gauri Devi was appointed executrix of a Will of Shiblal Tewari who left a minor son. She continued to manage the property of the minor for some time and then applied to the Court of Wards to take over the estate. The Court of Wards took over the estate and subsequently brought a suit against the defendant Taran Singh Hazari to recover an amount due on a mortgage bond executed by him in favour of Gauri Devi asexecutrix. The defence taken was that it was the executrix who could alone enforce the mortgage. It was held that Gauri Devi had fully administered the estate and was holding the property as a trustee for the minor. The duties of an executor are to pay the debts, collect the outstanding and to administer the estate of the deceased and after this has been done, and the estate has been settled, his duties as an executor are finished and if he is required to continue to be in charge of the property for the benefit of certain beneficiaries, he ceases to be an executor and becomes a trustee of;
the property. The duties of an executor and those of a trustee are quite different In the case of Madhu Sudan Bagchi v. Hrishikesh Sanyal, AIR 1949 Ail 93, Mootham, J. said as follows:
"The duties of an executor in general terms are to collect the assets of the deceased, to pay his debts and the funeral and testamentary I expenses and thereafter to make over the residue of the estate to the person or persons entitled thereto under the Will Where the testator intends to create a trust of the whole or part of his property his Will, if properly drawn, will i direct the executor, after performing the ordinary duties of administration, to make over the estate or such part thereof as the testator indicates to a trust or trustees to be held by them upon such trusts as are set out in the Will". (Para 20) "In India the words 'executor' and trustee" are indiscriminately used. One has, therefore, to find out where the executorship ends and the trusteeship begins. In this particular case, the Will itself creates a trust in express terms. In fact, the Will is nothing but a trust created by a testamentary instrument. Thus, as soon as the debts and liabilities have been paid and the legacies have been assented to the executors have dropped their position as executors and have assumed the duties of trustees. In this particular case, it has been stated in the petition that the estate has been duly administered and the executors have assented to the legacies in favour of the legatees. This is not effectively denied in the affidavit-in-opposition. In the assessment order, the finding is that inasmuch as the estate has to be made over at the future date to the beneficiaries, the administration of the estate continues until the period of distribution. This is an erroneous view and cannot be accepted. The Will itself states that the petitioners would hold the properties in trust for the sons and grandsons. Therefore as soon as the administration was ended the petitioners have been holding the properties as trustees. The position in law has been elucidated in V. M. Raghavalu Naidu & Sons v. Commr. of Income-tax, Madras, . It has been pointed out there that in the case of a specific bequest, executors do not become trustees for the beneficiaries until assents. In the case of a residuary bequest, executors become trustees when the residue is ascertained and the assent of the executors is either expressly given or inferred from conduct. In this case there may not have been a specific assent, but as the trustees have paid off the debts and liabilities of the testator and are holding the properties, paying or expending the income on behalf of the beneficiaries, their conduct would amount to an assent and the administration of the estate has come to an end."
18. In the case of Ummachikannummal Mohammed Pathummal v. Bhargavan Rajan, it was held that where an executor is placed in the stead of the testator he has right, of action against the testator's debtors and has also right to dispose of the goods of the testator towards the payment of his debts and the performance of his Will. An executor need not be expressly nominated; and if by necessary implication the testator recommends or commits to one or more the charge and office, or the rights which appertain to an executor, it amounts to as much as the ordaining or constituting him or them to be executors. Such an executor by necessary implication is usually called executor according to the tenor, and the question whether a person is executor according to the tenor or not depends upon the construction of the particular Will. The test for finding out whether a person is an executor according to the tenor is to find out whether he is, by necessary implication, nominated by the testator in nils stead to generally administer the estate and to pay the testator's debts and to receive his dues in the performance of his will.
There is a distinction between a trustee and an executor in that the former has only the power to pay what is vested in him as trustee to the persons for whose use he holds it, but has no general power to receive and pay what is due to and from the estate, which is the office of the latter. Where the persons mentioned in the will are directed to collect the income from the estate for two years after the death of the testator and to make certain payments to several specified individuals, but they are not given any fight to jointly administer the estate and to collect the dues and pay the debts of the testator or to attend to his obsequies, they cannot be said to have general power of administration of the estate as they have only the power to pay what is vested in them as trustees to the particular persons for whose use they hold it. They have no general power to receive and pay what is due to and from the estate and therefore they are not executors according to the tenor.
19. In the case of Rani Chhatra Kumar Devi v. Mohan Bikram Shah, 58 Ind App 279 : (AIR 1931 PC 196) it was held as follows :
"But even assuming that by reason of the contract the properties were impressed with a continuing trust in favour of the respondent, their Lordships are, unable to hold that this would entitle him to sue for possession as "owner". The Indian Law does not recognize. legal and equitable estates : Tagore v. Tagore, (1872-9 Beng LR 377); Webb v. Macpherson, ((1904) ILR 31 Cal 57) (PC). By that law, therefore, there can be but one "owner" and where the property is vested in a trustee the "owner" must, their Lordships think, be the trustee. This is the view embodied in the Indian Trusts Act 1882 : See Ss. 3,55,56, etc. The Act was only extended to Bengal in 1913, and it has been assumed at the Bar that it would accordingly have no application to the present case. Their Lordships are not satisfied that this is necessarily correct, having regard to the saving clause at the end of Section 1 of the Act, but they think that the question is of no importance in the present case, as the material provisions of the Act only embody the principles upon which the law has been administered in India from very early times.
The trustee is, in their Lordships' opinion, the "owner" of the trust property, the right of the beneficiary, being in a proper case to call upon the trustee to convey to him. The enforcement of this right would, their Lordships, think, be barred after six years under Article 120, Limitation Act, and if the beneficiary has allowed this period to expire without suing, he cannot afterwards file a possessory suit, as until conveyance he is not the owner. It is clear that such a trust as is relied upon in the present case would not fall within Section 10, Limitation Act, as it would be impossible to hold that the properties which vested in the appellant under the terms of the wills which have been proved were so vested for the specific purpose of making them over to the respondent : see per Lord Buckmaster in Khaw Sim Tek v. Chuah Hooi, (AIR 1922 PC 212). Indeed this argument has hardly been pressed before the Board.
For the reasons given their Lordships are unable to accede to the view taken by the Indian Courts, that the somewhat indeterminate contact which they held to be established between the Rajaand the natural father of the respondent gave him a title as owner of the properties which he claimed. The subordinate Judge was of opinion that on the strength of the oral agreement alone, which was subsequently embodied in the will of 1903," the respondent had the right to claim the estate on the Raja's death, and was entitled to get possession of it from the appellant, there being "nothing left for the will of 1904 to operate on." In the High Court the conclusion of Kalwant Sahay, J. was that under this will (of 1903) the adopted son
acquired the right to take possession of the property immediately on the death of the Raja" and that "the subsequent execution of the will of 1904 ..... could not in law take away the title which was created in favour of the adopted boy under the completed contract."
Their Lordships have no doubt that under the two wills which have been admitted to probate, all the estate of the Raja was legally vested in the appellant, and that on the assumption that the agreement upon which the respondent has relied before them was proved, the rights of the respondent were barred at the time when he instituted his suit.
The conclusion to which their Lordships have come makes it unnecessary for them to deal with the various subsidiary matters which are involved in the four appeals now under consideration. In their opinion, the respondent's suit No. 34 of 1924 should be dismissed, and the rent suit No. 4 of 1923, instituted by the appellant, decreed in the terms of her plaint, the two appeals brought up by her succeeding and those by the respondent failing, and they will humbly advise His Majesty accordingly. Under the peculiar circumstances of this case their Lordships think that the costs of the appellant, Rani Chhatra Kumari Devi, through this litigation should be paid out of the deceased Raja's estate. The costs of all other parties must be paid by the respondent and he must bear his own.
20. In the case of Ramabai Govind v. Raghunath , it was held that a trustee as such has no right to sell the trust property unless the deed of trust confers such a power. There is no such express power conferred by the Act upon the trustee. The limitation imposed by Section 36, Trusts Act on the power of a trustee to lease the trust property is suggestive of this fact. A trustee no doubt is a legal owner of the property the beneficial ownership in the same vesting in: the beneficiary or the cestui que trust. Merely because the property is vested in that trustee or the legal owner, the trustee is not entitled to sell the same. He is not the full owner of the property in the real sense of the term, because there is a beneficial interest and the ownership therein carved out in the property The legal ownership which vests in the trustee is for the purposes of the trust and the administration of the provisions of the trust.
When the testator expresses his confidence in an executor whom he appoints under the terms of his will that the executor will continue to manage the properties in the same manner as he (the testator) was doing during his lifetime, it predicates the care and caution as also the prudence in the manager of the properties of which the testator was capable. He expects that the executor will manage the properties as prudently and with the same care and caution as he himself was managing the same. That does not, however, import a power to sellof the type which the testator as the owner of the properties possessed."
21. In the case of Venkata Subamma v. Ramayya, reported in AIR 1932 PC 92 it was held that Section 59, Probate and Administration Act, 1881, does not suggest that the executor's title is derived from the probate. It was held that the doctrine in this law (English Law) that the title of an executor is derived from the Will and not from the probate, though it is probate alone which authenticates his right, applies to the wills of Hindus and has been adopted by the Legislature by Sections 4 and 90. It was further held that probate was not a part of the executor's title. Executor is the only person to whom the testator has confided the carrying out of his dispositions and it is not necessary that before the executor disposes of the property vested in him under Section 4, he must be clothed with probate and that vesting under Section 4 of the power of disposal under Section 90 is not dependent upon the grant of probate. It was held that in case of Hindu Wills to which the Hindu Wills Act does not apply the estate vests in the executor who Accepts office from the date of the testator's death and that the provisions of the Probate and Administration Act are applicable, even though probate has not been obtained.
22. In the case of Behary Lall Sandyal v. Juggo Mohun Gossain, reported in ILR (1879) 4 Cal 1 it was held by the Division Bench of this Court that upon a bona fide application for probate of a will, it is not the province of the Court to which the application was made to go into the questions of title with reference to the property of which the Will purports to dispose. The grant of probate does not prejudice the rights of any person who claims any such property. It was made clear in the said judgment that the grant of probate to the executor does not confer upon him any title to the property which the testatrix had no right to dispose of. It only perfects' the representative title of the executor to the property, which did belong to the testator and over which he had a disposing power.
23. In the case of Mt. Kulwanta Bewa v. Karam Chand Soni reported in AIR 1938 Cal 714, it was observed as follows : --
"As regards the next objection raised on behalf of the appellants which assails the validity of the mortgage, the argument may be summarised thus. Perganram was no doubt living jointly with his sons, forming a coparcenary with them, but the mortgaged premises Master's Hall Location was his self-acquired property which devolved on his sons by way of succession. It was quite proper therefore for his widow Mt. Kulwant Bewa after his death to take out, as she did, letters of administration to his estate including this property. As administratrix, she was accordingly the only person competent to deal with the property byway of mortgage or otherwise. There was however no valid execution of the mortgage in suit by or on behalf of the lady. It is further pointed out that as administratrix she had not obtained the permission of the District Judge under Section 307, Succession Act. 1925, to execute the mortgage, and that it was consequently not valid."
"The learned subordinate Judge recorded a finding regarding the character of the mortgaged property which, if well founded would really cut at the root of the appellant's objections. He held that it was the ancestral property of Perganram and passed upon his death to his sons by survivorship, the family being admittedly governed by the Mitakshara school. No letters of administration were therefore proper or necessary; Section 211(2), Succession Act, 1925; see also (1896) ILR 23 Cal 980 and ILR 62 Cal 733 : (AIR 1936 Cal 116). The grant of administration to Mt. Kulwant was accordingly wholly ineffectual and no title vested in her by virtue of the grant. The learned subordinate Judge further held that in any case the grant was limited to the minority of the sons, and hence ceased to be operative on their attaining majority which they did before the date of the mortgage. We are unable to agree with the learned Judge on any of these points."
"The next question is a more difficult one, as to whether the capacity of the two sons to create the mortgage was affected by the grant of letters of administration to their mother Mt Kulwant. We have not been referred to any authority to show that merely because an estate is in the hands of an administrator, the beneficiaries are thereby rendered incompetent to deal with their interest in the estate. Section 211, Succession Act, 1925, merely provides that the estate of a deceased person vests in his executor or administrator as such; these words "as such" are important, and show that the vesting is not of the beneficial interest in the property, but only for purposes of representation. The present case is one of intestate succession, and is not complicated by any question of the assent of the executor or administrator, being necessary to complete the legatee's title (Section 332). In such a case it does not, in our opinion, admit of any doubt that the beneficial interest vests in the heir-at-law, and we are unable to find anything in the Succession Act which limits the power of disposal of the heir-at-law over such estate merely because a grant of administration has been made. Nor does the Transfer of Property Act make the interest of the heir-at-law in the estate property which may not be transferred."
"The appellants rely strongly on Sections 220 and 273, and particularly on Section 216, Succession Act, but these are hardly of any avail. Section 220 merely deals with the point of time from which title of the administrator as such takes effect, while Section 273 only declares the conclusiveness of the grant as to the representative title of the grantee against all debtors of the deceased and all persons holding property which belong to him. As for Section 216, it enacts that after any grant of probate or letters of administration, no other than the person to whom the same may have been granted shall have power to sue or prosecute any suit, or otherwise act as representative of the deceased, until such probate or letters of administration has or have been recalled or revoked. In other words, it makes the executor or administrator the legal representative of the deceased. In fact the whole scheme of these and other provisions of the Act is only to provide for representation of the deceased's estate for purposes of administration, and is not intended to cut down the right of the beneficiaries. To put the matter in another way, the position is that where a grant of administration is made, the grantee is constituted the person competent and entitled to represent the persons beneficially interested in such persons. This, it may be pointed out, is recognised in Order 31, Civil P. C. in so far as it lays down that in all suits concerning property vested in an executor or administrator, it will be sufficient ordinarily to make the executor or administrator party, but it also provides that the Court may, if it thinks fit, order the beneficiaries or any of them to be made parties. The rule in fact is to make the beneficiaries parties when the estate had been fully administered."
We do not think therefore that merely because in this case Mt. Kulwant held letters of administration to the estate of Parganram that fact by itself had the effect of taking away the power of Ramchatti and Ramdas to deal with their beneficial interest in the estate. Even supposing that as a result of the grant of administration, the administratrix as the legal representative of the deceased was the only person competent to deal with the estate, it has still to be seen for how long this powerof administratrix would continue to the exclusion of the right of the beneficiaries. As already pointed out, all that Section 216, Succession Act, provides is that until the grant is recalled or revoked, no other person will have the right to act as representative of the deceased, but the right to represent the estate for the purposes specified in that section is not the same as the right to deal with the beneficial interest in the estate. Even taking the section as it stands, it is doubtful whether this may be regarded as lending any countenance to the proposition, once an administrator always an administrator. The moment administration is completed, the purpose of the grant will have been fulfilled, and the administrator would virtually become functus officio. It seems only reasonable to hold that thereupon the grant would stand revoked in effect, if not by a formal order of Court."
24. In the case of Commr. of Stamps Queensland v. Hugh Duncan Livingst on 1965 AC 694 it was held that assets as a whole were in the hands of the executor, his property and until administration was complete it could not be said of what the residue when ascertained, would consist of what its value would be. At the date of the widow's death, therefore, there was no trust fund consisting of the testator's residue, estate in which she could be said to have any beneficial interest because no trust had as yet come into existence to affect the assets of his estate. The testator(s) property was vested in his executors in full right and no beneficial interest in any item of that property belonged to his widow at the date of her death in succession duty. Any succession duty was not, therefore, exigible. Section 4, Succession and Probate Duties Act 1892 provides that every devolument by law of any beneficial interest in property upon the death of any person to any other person, in possession of expectancy, shall be deemed to confer on the person entitled by reason of such devolution/succession. By Section 12 duties on a prescribed scale are levied and charged in respect of every such succession as aforesaid.
25. In the case of Bhim Singhji v. Union of India, the question of constitutional validity of hereinafter referred to as the 1976 Act this Act was raised. It was a five-Judge Bench, the majority of Judges, i.e., Chandrachud, C.J., P. N. Bhagwati and Krishna Iyer, JJ. held that the entire Act was valid save and except Section 27(1) in so far as it imposed a restriction on transfer of any urban or urbanisable land with a building or of a portion of such building which was within the ceiling area. Chandrachud, C.J. delivered a judgment for himself and on behalf of Bhagwati, J. Krishna Iyer, J. agreed with the learned Chief Justice regarding the constitutional validity and Section 27 but delivered a separate judgment. Tulzapurkar, J. and Sen, J. delivered the minority judgment holding that the provisions of Sub-sections (1), (2) and (3) of Section 23 and the opening words subject to the provisions of Sub-sections (1), (2) and (3) in Section 23(4) of the said Act are ultra vires of the Parliament. Section 27, being severable, was also declared to be ultra vires. The remaining provisions of the said Act. including Sub-section (4) of Section 23 were declared as valid.
26. In the case of State of Gujarat v. Parshottamdas Ramdas Patel , it was held as follows :--
"With great respect to the High Court of Delhi it has to be stated that the view taken by it is wholly incorrect. The High Court of Delhi omitted to notice that in order to exclude a land from the definition of vacant land it should be shown that it was a land on which construction of a building was not permissible under the building regulations in force in the area in which such land was situated. The question whether a piece of land is a vacant land or not does not depend upon the fact whether a prudent man would put up a building on that land or not after the issue of a notification under Section 4(1), Land Acquisition Act, 1894. Nor a land will cease to be a vacant land merely because the permission of certain authority is to be taken to put up a building thereon. It may be further seen that what clause 'seventhly' in Section 24, Land Acquisition Act, 1894 provides is that any outlay or improvements on, or disposal of the land acquired, commenced, made or effected without the sanction of the Collector after the date of the publication of the notification under Section 4(1), Land Acquisition Act, shall not be taken into consideration while awarding compensation. It does not ban the construction of any building on the land which is so notified. The High Court of Gujarat against whose judgment these appeals have been filed also committed an error in accepting a similar contention which was urged before them. The declaration made by the High Court in these cases that the land acquisition proceedings did not suffer from an infirmity which indirectly suggests that the proceedings should go on is again erroneous. It is open to the State Government to drop the land acquisition proceedings and to withdraw the lands from acquisition under Section 48, Land Acquisition Act, 1894. We are informed that the State Government has in fact subsequently withdrawn these lands from acquisition. The proceedings under the Land Acquisition Act, 1894 cannot therefore have any bearing on the question whether the lands in question are vacant lands or not for purposes of the ceiling law contained in the Act. When the lands in question or bulk of them are likely to be acquired the ceiling law by paying compensation as provided therein, it would not be proper to compel the Government to acquire them under the provisions of the Land Acquisition Act, 1894.
As already stated the Act has the overriding effect on all other laws."
27. In the case of Maharao Sahib Shri Bhim Singhji v. Union of India , Chandrachud, C.J., gave the fuller reasons as directed by the original order .
28. In the case of S. P. Gupta v. President of India , it was held as follows : --
"But there is one principle on which there is complete unanimity of all the courts in! the world and this is that where the words or the language used in a statute are clear and cloudless, plain, simple and explicit unclouded and unobscured, intelligible and pointed so as to admit of no ambiguity, vagueness, uncertainty or equivocation, there is absolutely no room for deriving support from external aids. In such cases, the statute should be interpreted on the face of the language itself without adding, subtracting or omitting words therefrom". (Para 197) "It is equally well settled that it is not the duty of the court to import words which have been omitted deliberately or intentionally in order to fill up a gap or supply omissions to fit in with the ideology or concept of the Judge concerned The words and the language used must be given their natural meaning and interpreted in their ordinary and popular sense." (Para 198) "There may be a third type of cases which may be on the border line where the language may admit of two interpretations in which case the court may consider the desirability of resorting to external a ids in order to catch and delve into the spirit and object of the statute." (Para 199)
29. In the case of Attorney General v. H. R. H. Prince Earnest Augustus of Hanover, (1957) 1 All ER 49, it was held that where there was clear indicating words, they should be given their natural meaning and it should not be restricted either (a) by the Preamble (b) by any absurdity or inconvenience of the result and (c) by consideration of the words of the earlier Statute.
30. In the case of Manohar Lal v. The State of Punjab , it was held as follows : --
"The long title of the Punjab Trade Employees Act, no doubt, indicates the main purposes of the enactment but it cannot control the express operative provisions of the Act, such as for example the terms of Section 7(1). The ratio of the legislation is social interest in the health of the worker who forms an essential part of the community and in whose welfare, therefore, the community is vitally interested. It is in the light of this purpose that the provisions of the Act have to be scrutinized."
31. In the case of Wealth Tax Commissioner v. Mrs. C. M. U. Kinnison, the question of interpretation of Section 61, Wealth-tax Act, was involved as the same is not in pari materia with the present Act we refrain from dealing with the same. DECISION
32. The first question to be determined is whether at the relevant time, i.e. when the Ceiling Act came into force, the administration of the estate by the Bank as Executor was complete and they had started to function as Trustees under the Will as all the legacies had been paid by them. Having regard to the provisions of the will and the supplementary affidavit affirmed on behalf of the Bank, it is quite clear that at the relevant time, i.e. when the Ceiling Act came into force, as all the legacies, debts and funeral and testamentary expenses had been paid, the bank had ceased to function as executors but they were acting as trustees. Reference may be made in this connection to the decision in the case of Smt. Suhashini Karusi v. Wealth tax Officer Dist. 1(2) 'D' Ward (ibid), .
33. It is clear that it was the bank which was holding the said property within the meaning of the Ceiling Act. This forms part of the residuary estate under the Will of Dunderdale. To put it otherwise, it comes under the mischief of the said Act. The Bank was the legal owner of the said property. Indian Law does not recognise the distinction between legal and equitable estate -- (Chatra Kumar Dehi v. Mohan Bikram Shah (AIR 1931 PC 196) (ibid). The beneficiary has got certain rights but no interest in the property as such. The beneficiary has neither any legal nor equitable interest. It has no legal interest in the property because it is the trustees who have got legal interest. As beneficiaries the residuary legatees may have beneficial interest in respect of the income from properties but no interest in the property as such. The concept of equitable estate is not recognised in our country. Reference may be made in this connection to W. O. Holdsworth v. The State of Uttar Pradesh (ibid) and Bholanath Shaw v. Badrinath Shaw (ibid). Moreover, as it is clear from the Will itself the residual beneficiaries cannot be said to hold any of the residual properties, they are only entitled to certain amounts from the net income of the investments and residual estate. Such beneficiaries cannot be said to be holding any such property.
34. The position, in our opinion, would be the same if at the relevant time the bank was acting as executor and not as trustee. The only person in the present case who could have been said to have been holding the property within the meaning of Section 3 is the Bank and not the residuaries.
35. However, the main question is whether the Bank is entitled to any exemption under Section 19. It is true that for the purpose of Section 3 if is to be held that the Bank was holding the property. However, it cannot be said that because it was holding the property within the meaning of Section 3, therefore, it is automatically entitled to the exemption granted under the said Act by Section 19 in respect of the said properties. The same expression may be used in different places in a Statute. Generally they bear the same meaning but they can bear different meaning depending on the context. We have to interpret one particular expression in the light of the section itself and the Act as a whole. The definition section itself makes it clear. It is to be seen from Section 19 itself that the vacant lands held by public charitable and religious trusts are specifically given the exemption. We must read the section as a whole and we must not read only one part of the section without considering the rest. It is part of a whole scheme. For the purpose of ascertaining what is meant by "any vacant land held by any bank" we are not bound to give it the same meaning as given in Section 3. It is not part of the Court's duty to ignore the other provisions of Section 19. The Legislature has made it clear in Section 19 that any vacant land held by public charitable or religious trusts will be exempted from the mischief of the Act. Trusts can be publicor private. For the purpose of granting exemption, the Legislature has chosen and singled out public charitable or religious trusts, i.e. which are known as public trusts. The Legislature has by necessary implication excluded the private trusts. It is clear from the language of Section 19 that the Legislature only wanted to confer the benefit upon the public charitable and religious trusts and not the private trusts. In this background the meaning of the expression vacant land held by any Bank within the meaning of Clause (iv) of Section 19(1) is to be interpreted. Reading in that manner, we are of the opinion that the vacant land held by a Bank on a private trust does not come within the exemption clause in view of the special provisions regarding the public and charitable trusts in Section 19 itself, i.e., Clause (iv). In our opinion, reading the section as a whole, a private trust, that is, a trust which is not public charitable or religious trust is not entitled to any exemption whether it is held by the Bank or a private person.
36. It is true that if the meaning of the Act is clear, then reference should not be made to an external evidence. In our opinion, there is no question of taking resort to external evidence in the facts and circumstances of this case. We are merely interpreting one part of the section with reference to the other part.
37. If we do not interpret the said provisions in such a fashion, there would be a serious, anomalous and ridiculous situation. A property hold under a private trust by an ordinary individual as trustee at the relevant time will not be exempted in view of the provisions of the Act. But if the very same property is held by a Bank on a private trust, then if we accept the submission made on behalf of the Bank, the same would be exempted. There is no jusitifcation for such interpretation. This, in our opinion could not have been the intention of the Legislature having regard to the express exclusion of all private trusts from the provisions of exemption. There is no reason why we should interpret the Act in a manner the result of which would be that though a property held in a private trust by a private person would be exempted under Section 19, but if the same was held by a Bank at the relevant time, the same would get the benefit of exemption.
38. Such interpretation is also inconsistent with the scope and object of the Act which would appear from the Statement of Objects and Reasons given in the Bill and also to the Preamble of the Act.
Statement of Objects and Reasons :
There has been a demand for imposing a ceiling on urban property also especially after the imposition of a ceiling on agricultural lands by the State Governments. With the growth of population and increasing urbanization, a need for orderly development of urban areas has also been felt. It is, therefore, considered necessary to take measures for exercising social control over the scarce resources of urban land with a view to ensuring its equitable distribution amongst at various sections of society and also avoiding speculative transactions relating to land in urban agglomerations.
With a view to ensuring uniformity in approach Government of India addressed the State Governments in this regard, eleven States have so far passed resolutions under Article 251(1) of the Constitution empowering Parliament to undertake legislation in this behalf. The present proposal is to enact a Parliamentary legislation in purssuance of these resolutions. The Bill is intended to achieve the following objectives :
(i) To prevent concentration of urban property in the hands of a few person and speculation and profiteering therein;
(ii) to bring about socialization of urban land in urban agglomerations to subserve the common good by ensuring its equitable distribution;
(iii) to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials and to ensure the equitable utilization of such materials; and
(iv) to secure orderly urbanization. The Bill mainly provides for the following :
(i) Imposition of a ceiling on both ownership and possession of vacant land in urban agglomerations, the ceiling being on a graded basis according to the classification of the urban agglomeration ;
(ii) acquisition of the excess vacant land by the State Government with powers to dispose of the vacant land to subserve the common good;
(iii) payment of an amount for the acquisition of the excess vacant land in cash and in bonds;
(iv) granting exemptions in respect of certain specific categories of vacant land;
(v) regulating the transfer of vacant land within the ceiling limit;
(vi) regulating the transfer of urban or urbanizable land with any building (whether constructed before or after the commencement of the proposed legislation) for a period of 10 years from the commencement of the legislation of the construction of the building whichever is later;
(vii) restricting the plinth area for the construction of future residential buildings; and
(viii) other procedural and miscellaneous matters.
Preamble of the Act :
"An Act to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit, to regulate the construction of buildings on such land and for matters connected therewith with a view to preventing the concentration of urban land in the hands of a few persons and speculation and profiteering therein and with a view to bringing about an equitable distribution of land in urban agglomerations to subserve the common good.
Whereas it is expedient to provide for the imposition of a ceiling on vacant land in urban agglomerations, for the acquisition of such land in excess of the ceiling limit to regulate the construction of building on such land, and for matters connected therewith, with a view to preventing the concentration of urban land in the hands of a few to bringing about an equitable distribution of land in urban agglomerations to subserve the common good;
And whereas Parliament has no power to make laws for the States with respect to the matters aforesaid except as provided in Articals 249 and 250 of the Constitution;
And whereas in pursuance of Clause (1) of Article 252 of the Constitution resolutions have been passed by all the Houses of the Legislature of the States of Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh and West Bengal that the matters aforesaid be regulated in these States by Parliament by law".
39. In our opinion, though it is open for a Bank to act as an executor or trustee in respect of a private trust and though it may be treated as part of the banking business of the company, the real question is whether they are entitled to exemption and in this context the part played by them under the Banking Regulation Act, 1949 and the State Bank of India Act, 1955 does not make any difference. Accordingly, it is not necessary for us to deal in details with the relevant provisions of the same.
40. For the reasons aforesaid this appeal is allowed and the writ petition is dismissed. We set aside the judgment and the order passed by the learned Judge. All interim orders are vacated. There will be no order as to costs.
41. Prayer is made for a Certificate under Article 134A read with Article 133 of the Constitution for appeal to the Supreme Court of India. This case, in our opinion, involves not merely questions of law but substantial questions of law. The question is whether a vacant land held by a bank under a. private trust is entitled to exemption under Section 19 Ceiling Act. The Act concerned is an All India Act and, therefore, this decision will be applicable to the land held by a Bank in any part of the territory of India. It is well known that many of the banks act as executor and/or trustee. The question involved in this case, to our knowledge, has not yet been decided by any other court in India. Therefore, in our opinion, this case involves substantial questions of law of general importance which need be decided by the Supreme Court of India. Accordingly, we grant Certificate as prayed for.
42. Prayer for stay of the operation of the order is allowed Accordingly, there will be a stay of the operation of the order dated 12th April, 1988, for a period of six weeks from date. However, during the period of stay, there will be an order of injunction restraining the Bank from disposing of and/or transferring or in any way alienating the property in question.
43. All parties concerned to act on a signed copy of the minutes of the operative portion of the judgment and order made herein on the usual undertaking.
Satyabrata Mitra, J.
44. I agree.