Bombay High Court
Parvatibai And Another vs Maharashtra Revenue Tribunal And ... on 19 January, 1994
Equivalent citations: AIR1995BOM19, 1994(2)MHLJ1398, AIR 1995 BOMBAY 19, 1994 BOMCJ 586
Author: V.S. Sirpurkar
Bench: V.S. Sirpurkar
ORDER
1. This is a Writ Petition on behalf of the original landholder Fulchand Jaiswal. The said landholder is now dead and is being represented by his legal representatives.
2. The original landholder filed a return under Section 12 of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 (hereinafter to be referred as "the Ceiling Act"). He showed the total holdings of his family to be 58.54 acres. By order dated 11-1-1977 the proceedings were concluded by the Surplus Land Determination Tribunal who observed that certain lands were not shown by Fulchand in his return and ultimately it came to be decided that the total holding of Fulchand was 119.88 acres out of which 2.17 acres were excluded as Potkharab area. After allowing the limit of 54.00 acres of land to be retained, the Surplus Land Determination Tribunal declared 63.71 acres as surplus land. An appeal was filed against this decision before the Maharashtra Revenue Tribunal. The Maharashtra Revenue Tribunal by its order dated 5-7-1977 set aside the order on the ground that the notices were not issued to the proper parties who should have in fact been noticed. It also observed that ait the persons interested in all the lands were not noticed or heard. The Maharashtra Revenue Tribunal also held that there was no proper publication of the notices in villages and, therefore, a practically de novo enquiry was ordered by the Maharashtra Revenue Tribunal. The last three lines of the Tribunal's order are telling: "It will further be seen that all the persons interested in the said lands are served with notices under Section 17 directing them to file their submissions before it allowing them to lead evidence oral as well as documentary and then pass fresh order according to law. All the points in appeal are kept open. "Accordingly, the matter went back. The Surplus Land Determination Tribunal it seems, issued the notices and posted the case by a fresh order dated 30-6-1987 by which again 63.71 acres were declared to be the surplus land. The landholder approached the Maharashtra Revenue Tribunal by way of an appeal and mainly contended that no opportunity was given to him for leading the evidence though his witnesses were present and thus the previous order of remand passed by the Maharashtra Revenue Tribunal was flouted in spirit. The landholder also pointed out that in fact he wanted to lead the evidence to show that the transfers which he had effected of the lands between the years 1972 and 1975 were for the genuine reasons, i.e. his financial stringency on account of his bad health and were not in fact to avoid the provisions of the Ceiling Act. The landholder contended that in fact he was a patient of Diabetes and High Blood Pressure and on account of that he had to spend substantial amounts and in order to meet these expenses he had transferred the lands and not to avoid the incoming provisions of the Ceiling Act. The next point urged by the landholder before the Maharashtra Revenue Tribunal was that the land to the extent of 36.44 acres was acquired by the Nagpur Improvement Trust. He pointed out that 27.30 acres out of the acquired land was thereafter leased out to the petitioner in the year 1975 and that was with retrospective effect, that is to say the lease was to operate from 1969 to 1999. His contention is that, therefore, he was in possession of the land which came in the category of the exempted land. He, therefore, contended that the land to that extent could not be included in his ceiling area. By way of the third point, the landholder urged before the Maharashtra Revenue Tribunal that the Surplus Land Determination Tribunal had not given him any opportunity to prove the extent of un-cultivable or Potkharab land. On all the three questions, the appeal of the landholder was turned down by the Maharashtra Revenue Tribunal necessitating the present Writ Petition before this Court.
3. As regards the first question of the opportunity, I have gone through the records. Shri S.R. Deshpande, the learned Counsel for the petitioners, drew my attention to the order-sheets of the enquiry. It seems from those order-sheets that on 17-7-1976 the representative of the landholder was asked to file the list of witnesses of the interested persons and he had filed that list on 23-9-1986. The matter was thereafter put on 30-10-1986 but probably was never taken up till January, 1987 when the notices were ordered to be issued to the landholder. Then again on 12-2-1987 the representative of the landholder was present and notices were given to produce the original documents. On 3 occasions thereafter, i.e. on 9-3-1987, 23-3-1987 the Presiding Officer of the Surplus Land Determination Tribunal was absent though the landholder was present. There then reads an order-sheet dated 20-5-1987 that the case was received from S.D.O., Nagpur and that it was submitted to him for scrutiny and then the case was fixed for consideration and order and the order seems to have been passed on 29-6-1987 on which the order-sheet reads: "Order ready. Landlord be noticed". What one fails to see is that as to when the opportunity was given to the landholder to lead evidence as was the import of the previous order of the Maharashtra Revenue Tribunal. There is no endorsement whatsoever in the whole record on behlaf of the landholder that he was not prepared to lead any evidence or that he was not prepared to take part into the enquiry. The Maharashtra Revenue Tribunal in its first order had categorically observed that the proper parlies were never noticed and there was no opportunity to the landholder to lead evidence, etc. In that view of the matter, it had already directed that the opportunity should be given to the parties to lead evidence and to present their case. From the record at least this does not seem to be the position. The Maharashtra Revenue Tribunal has considered this aspect in paragraph 4 of its order. The learned Member it seems was satisfied from the fact that the notices under Section 17 appear to have been despatched from the record. This is how the learned Member treats the matter.
"I am satisfied that fresh notices were issued after remand and all the lands taken up for consideration have been covered. The impugned order is also signed by the members and Chairman of the S.L.D.T. It is passed by majority decision. It is thus evidence that the direction of the appellate court have been complied with by the trial Court."
The only observation which can be made is that the learned Member did not bother to consult the order by which the remand was directed. The remand was hot directed merely for the parties being noticed nor was it restricted to the order being passed by the majority decision. In fact, the import of the first order passed by the Maharashtra Revenue Tribunal was to give a reasonable opportunity to lead evidence to all the parties present. At least from the record this does not seem to be the position. Merely by issuance of notices under Section 17, it could not be said that a proper opportunity was given. Had the learned Member bothered to look into the order sheet, he would have come to the conclusion that no opportunity at all was given to lead evidence, etc. In this view of the matter, in fact the whole enquiry is vitiated. It will, therefore, be proper to allow the parties to have a fresh opportunity but not before adverting to the second point urged by Shri Deshpande.
4. Shri Deshpande pointed out that the Surplus Land Determination Tribunal had calculated 36.44 acres of land which was admittedly acquired by the Nagpur Improvement Trust. He was at the pains to point out that thereafter in the year 1975 out of these 36.44 acres, in all 27.30 acres of land were leased in favour of not the sole landholder, namely, Fulchand but his four other relatives. He, therefore, questioned the finding of the Maharashtra Revenue Tribunal to the effect that this land could also be included in the ceiling area of Fulchand. In his order the learned Member of the Maharashtra Revenue Tribunal has relied on the so called admission by Fulchand made in his statement dated 11-1-1977 that the field survey numbers in question were returned to him in 1968 by the Nagpur Improvement Trust and that since then he was in de facto possession. It is, therefore, clear that the Maharashtra Revenue Tribunal was alive to the position that the fields in question were in possession of Fulchand because of the lease created in the year 1975 by the Nagpur Improvement Trust in favour of Fulchand. The learned Member also was impressed by the fact that the revenue record showed the exclusive possession of Fulchand over these fields to the extent of 27.30 acres. On this simple logic, the learned Member proceeded to hold that this was, therefore, an intelligent plan by Ful-chand to hoodwink the provisions of iaw and to persetuate his possession over the lands. Strangely enough, without bothering to see the provisions of Section 3 as well as Section 47 of the Ceiling Act, the learned Member has completed the discussion on this important issue. Explanation to Section 3 is as under:
"Explanation -- A person or family unit may hold exempted land to any extent."
What the exempted lands are is provided in Section 47. For our purpose Section 47(1)(b) is relevant:
"Section 47(1) The following lands shall be exempted from the provisions of this Act, that is to say, --
(a).....
(b)land belonging to, or held on lease from or by, a local authority, or a University established by law in the State of Maharashtra, or agricultural college or school or any institution doing research in agriculture approved by the State Government;
............"
January 19, 1994.
5. From the plain language of Section 47(1)(b) it could be safely said that any land belonging to the local authority or any land held by it or any land owned or held by the other institutions like University, agricultural college or school or institution doing research in the agriculture and which is approved by the State Government becomes an exempted land straightway and could be covered within the language of Explanation to Section 3. There are other classes of lands which have been declared by Section 47 to be the exempted lands. Section 47 of the Ceiling Act runs in two parts, the first part merely declares all the lands which are the exempted lands by themselves. Though lands include the lands held by the Government, the lands held by the local authorities, universities, lands held by regimental farms, or the lands leased by the Land Development Banks or the Central Co-operative Banks or the lands held by a bank or a co-operative society as security for recovery of its dues. All these lands covered by sub-section (1) of Section 47 straightway become the exempted lands and indeed nothing is required to be done to clothe any such land with the status of the exempted lands. Sub-section (2), however, gives a power to the State Government to exempt from the provisions of the Act any lands and the subsequent provisions of sub-sction (2) provide the guidelines for this power. The guiding principles and the modality for giving exemptions and recognising some other lands not covered by Section 47(1) are to be found in sub-section (2). In order that the land in question should have the status of the exempted land in pursuance of Section 47(1)(b), it will have to be, therefore, seen whether the land in question is owned by a local authority or any institution named in Section 47(1)(b). Even if such land which is owned by any institution like local authority is held by somebody else, even then such land does not lose its character as an exempted land. The language of Section 47(1)(b) is clear as it includes the land belonging to, or held on lease from or by a local authority. In this case, firstly it is an admitted position that the land comprising of 36.44 acres was compul-sorily acquired by the Nagpur Improvement Trust. Thus, the ownership of this land after the acquisition was vested in Nagpur Improvement Trust. The land, therefore, obvi-ously became an exempted land for the purposes of Section 47(1)(b) if the Nagpur Improvement Trust could be called to be a local authority or could have the colour of the institutions which have been named in Section 47(1)(b). The land so owned or belonging to the Nagpur Improvement Trust if it was held by Fulchand and others on lease, then also the land would not lose its colour as an exempted land. In the present case, so far as that factual aspect is concerned, there is no dispute. Shri Badar, the learned Counsel for the Nagpur Improvement Trust, did not dispute the factual position that the land concerned admeasuring about 36.44 acres was compulsorily acquired by the Nagpur Improvement Trust and out of it 27.30 acres were thereafter leased out in favour of Fulchand and 5 others in the years 1975 and that the lease-deed covered the period from 1969 to 1999. A lease-deed is on record and, therefore, the factual position which is obtained is that the exempted land which belonging to Nagpur Improvement Trust came to be leased in favour of the petitioner and 5 others and thus the petitioner and 5 others held the land on lease from the Nagpur Improvement Trust.
6. Once this factual position is obtained, it remains to be seen whether the Nagpur Improvement Trust is a 'local authority' within the meaning of that term as used in the Ceiling Act. For this purpose, it will have to be examined as to what is the character of a local authority and what is the magnitude of that term and whether the Nagpur Improvement Trust can be covered within that term. The term 'local authority' is not defined anywhere in the Ceiling Act. Section 2(32) of the Ceiling Act provides that the words and expressions used in this Act but not defined shall have the meanings assigned to them in the Code. 'Code' is defined in Section 2(5A) to mean the Maharashtra Land Revenue Code. 1966. However, the definition of 'local authority' is not even provided in the Maharashtra Land Revenue Code. Under such circumstances, it was the contention of Shri Badar, learned Counsel for Nagpur Improvement Trust, that the terminology used in the Maharashtra Regional and Town Planning Act, 1966 could be used. He pointed out that the term 'local authority' was defined in Section 2(15) of the Maharashtra Regional and Town Planning Act, 1966, particularly clause (iii) of sub-clause (c) of Section 2(15) provides that the local authority means the Nagpur Improvement Trust constituted under the Nagpur Improvement Trust Act, 1936 which is permitted by the State Government for any area under its jurisdiction to exercise the powers of a planning authority under this Act. Again Section 2(19) of the Maharashlra Regional and Town Planning Act defines the planning authority to mean a local authority and includes a special planning authority constituted or appointed under Section 40. Shri Badar, therefore, says that the Nagpur Improvement Trust has already been recognised as a local authority within the meaning of the Maharashtra Regional Town Planning Act, 1966 and for interpreting that term as appearing in the Ceiling Act, the Court could rely on the definitions as given in the Maharashtra Regional and Town Planning Act. Though the contention that the Nagpur Improvement Trust is a local authority is correct, the argument of Shri Badar is unsound. It is the canon of the law of interpretation of statutes that for defining the terms in one Act, the definitions given of that particular term in some other enactments could not be used. The Supreme Court in Union of India v. R.C. Jain has cautioned against this in the following terms (at p 952):
"We refrain from borrowing the meaning attributed to the expression in those rules as it is not a sound rule of interpretation to seek the meaning of words used in an Act, in the definition clause of other statute. The definition of an expression in one Act must not be imported into another. It would be a new terror in the constitution of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone. . . . . "
It is, therefore, clear that we cannot search the true import of the term 'local authority in the Maharashtra Regional and Town Planning Act or the definition given therein of the term 'local authority'. Having found that there is no definition of the term 'local authority' available in the Maharashtra Land Revenue Code as per the dictates of Section 2(32), a recourse will have to be taken, therefore, to the Bombay General Clauses Act. Section 2(26) of the Bombay General Clauses Act, 1904 provides the definition of 'local authority'. It runs as under (at p. 952):--
" 'local authority' shall mean a municipal corporation, municipality, local board, body of port trustees or commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund."
It will have to be seen, therefore, as to whether the Nagpur Improvement Trust fits into this definition which is provided by the Bombay General Clauses Act.
7. In Union of India v. R.C. Jain's case (cited supra) the Supreme Court was posed with the similar question inasmuch as the Supreme Court was called upon to interpret the very same terminology 'local authority' as appearing in the Payment of Bonus Act, 1965. A similar problem occurred there also inasmuch as the term 'local authority' that was used in the Payment of Bonus Act, 1965 was not defined in that Act. The Supreme Court, therefore, held that it was not proper to turn to any other enactments for examining as to what the true import of the term 'local authority' was and that the only course open was to take recourse to the provisions of the General Clauses Act. This is how the Supreme Court approaches the problem (at p 952):
"1. ........ The expression 'Local Authority' is not defined in the Payment of Bonus Act. One must, therefore, turn to the General Clauses Act to ascertain the meaning of the expression ........... Though the expression appears to have received treatment in the Fundamental Rules and the Treasury Code, we refrain from borrowing the meaning attributed to the expression in those rules as it is not a sound rule of interpretation to seek the meaning of the words used in an Act, in the definition clause of other statutes......."
In paragraph 2 it proceeds to say (at 952):
"Let us, therefore, concentrate and confine our attention and enquiry to the definition of 'Local Authority' in Section 3(31) of the General Clauses Act....."
Fortunately for us the term 'local authority' which is used in the said Act is defined in the Bombay General Clauses Act, 1904 which is again no different from the definition given in Section 3(31) of the General Clauses Act. The definition in General Clauses Act vide Section 3(31) is as under:--
"Section 3(31): 'local authority' shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund."
The definition given in Section 2(26) of the Bombay General Clauses Act, 1904 is practically identical, which is as under:.-
"Section 2(26): 'local authority' shall mean a municipal corporation, municipality, local board, body of port trustees or commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund."
The matters have become more easy because Municipal Corporation is also included in the term 'local authority' which is conspicuously absent in the definition given in the Central Act. It will have to be, therefore, examined as to whether the Nagpur Improvement Trust comes within the framework of the definition 'local authority'.
8. First and foremost, the Nagpur Improvement Trust is the creature of the Nagpur Improvement Trust Act, 1936. It extends to the area comprised within the limits of city of Nagpur and to such other area outside those limits as the State Government may from time to time by notification declare. Section 4 provides for the constitution of the Trust to suggest that there shall be 9 trustees. Out of these 9 trustees, one would be the Councillor of the Corporation. Four persons could be appointed under sub-section (2) from whom not less than 2 shall be non-officials residing within the limits of the area to which the Act applies. One member would be the member of the Bombay Legislative Assembly. Even the Chairman of the Standing Committee of Corporation is an ex-officio trustee out of the total of 9 trustees. Thus, it is clear that at least 3 of the 9 trustees are the democratically elected representatives of the people. Further 2 persons who are to be appointed are essentially the residents of the city of Nagpur probably to represent the residents of the city of Nagpur. The Board of Trustees thus has essentially a representative character. The Trust enjoys autonomy in the matters of its policies as also to the extent subject to of course the control of the State Government. Such control can be seen in the various provisions of the Act. However, the general power to execute the betterment schemes and the improvement schemes for the city of Nagpur lies practically solely with the Trust. Section 16 provides that the question would be decided by a majority of votes of the trustees present and voting. Thus, this Trust operates and acts on the democratic principles. Section 24C and Section 25 amongst other Sections are the provisions which bespeak of the supervisory and the controlling power of the State Government over the Nagpur Improvement Trust. While in Section 24C there is a power in the State Government to direct the proper performance of duties, Section 25 makes it obligatory on the Trust to supply the vital information and documents to the State Government. Chapter IV deals with the improvement schemes. In this Chapter generally the types of improvement schemes and the modalities of working of those schemes is provided. Those schemes could be re-buitding schemes, re-housing schemes, street schemes, a deferred street scheme, development scheme, housing accommodation scheme, future expansion or improvement scheme, drainage or sewerage disposal scheme, etc. There is almost a complete autonomy in planning and the execution of these various schemes for the framing of which the Trust is dutybound. Section 36 onwards provide for the procedure in framing and executing the scheme. Chapter V provides for the powers and duties of the Trust where a scheme has been sanctioned. Amongst the other powers, the Trust enjoys the powers of the City of Nagpur Corporation. Section 52 specifically provides that the Trust shall enjoy the various powers as enjoyed by the Nagpur Municipal Corporation under the provisions of the City of Nagpur Corporation Act, 1948. Under Sec-tion 52A the Trust has the power to make and perform contracts. Thus, not only that the Nagpur Improvement Trust enjoys its own powers in some important areas, it enjoys powers of the Nagpur Municipal Corporation also. Chapter VI and more particularly Section 59 has clothed the Trust with a power of the compulsory acquisition of land. Chap-ter VI generally provides the modality for such compulsory acquisition. Section 73 provides for the power of recovery of money payable in pursuance of Sections 68, 70 and 72 and it specifically provides that all monies payable in respect of any land by any person in respect of betterment contribution shall be recoverable in the same manner as provided in Chapter XII of the City of Nagpur Corpora-tion Act, 1948. By virtue of Section 76, the Trust has the power to dispose of the lands, more particularly the Section gives the power to retain or may let on hire, lease, sell, exchange or otherwise dispose of any land vested in or acquired by it under the provisions of the Act. Chapter VII of the Act provides in respect of the taxation while Chapter VIII provides for the finance. Sec-tion 77 provides that the duty imposed by the Indian Stamp Act, 1899 on the instruments of transfer of the immovable property situated within the area to which the Nagpur Improvement Trust Act extends which are executed after the commencement of the Act be increased by one-half per cent on the value of the property so situated, thus providing funds for the Nagpur Improvement Trust. Section 81 in Chapter VIII speaks of the Trust fund. Under that provision, a Trust Fund shall be formed for the Trust and shall be placed to the credit thereof all sums received by or on behalf of the Trust under this Act or otherwise. Section 82 provides for the application of Trust Fund and directs that the Trust Fund shall be applicable only to the payment of the charges and expenses incidental to the several matters in this Act, and to any other purpose for which by of under this Act or under any other enactment for the time being in force powers are conferred or duties imposed upon The Trust. This Chapter generally provides for the finances which come or are accured to the Nagpur Improvement Trust. Section 82F (1)(b) provides that the moneys credited to the revenue account shall be applied to paying all sums due from the Trust in respect of rates and taxes imposed under the City of Nagpur Corporation Act upon the land vested in the Trust. In fact, the whole Section provides as to how the moneys credited to the revenue account are to be spent. The whole Section 82F would show that the revenue account is to be separately maintained and the moneys therein have to be defrayed in accordance with the provisions of Section 82F. Similar is the provision regarding capital account. Under Section 82D the Trust is dutybound to spend the moneys in capital account for meeting all costs of framing and executing improvement schemes for acquiring lands, for construction of buildings, for repayment of loans, for contributing towards the costs of surveys, etc. The most important amongst these provisions is Section 83 whercundcr the Nagpur Municipal Corporation has to part with the portion of the municipal fund in favour of the Nagpur Improvement Trust. Section 83(1) provides that the Corporation shall pay from the Corporation fund to the Trust on the first day of each quarter, so long as the Trust continues to exist, a sum equivalent to half per cent per quarter on the annual rateable valuation of houses within the city as it stood on the first day of the last preceding quarter. Sub-section (3) provides that the payments prescribed by sub-sections (1) and (2) shall be made in priority to all other payments due from the Corporation except the sums under the preference. Section 84 provides the Trust with a power to borrow money. Under Section 84 it is provided that the Trust shall be deemed to be a local authority, as defined in the Local Authorities Loans Act, 1914, for the purpose of bor-rowing money under that Act, and the making and execution of any improvement scheme mentioned in this Act shall be deemed to be a work which such local authority is legally authorised to carry out. In short, the whole resume of these provisions has been deliberately given in order to show firstly that the Nagpur Improvement Trust is not only the child of an Act but it is brought into existence solely for development of the City of Nagpur and to take up the Governmental and/or municipal functions regarding the buildings and constructions, maintenance of drainages, maintenance of streets, etc; that it has a representative character and further has to act within the framework of law; that it also has the power to generate the funds and to spend the said funds for the betterment of the city of Nagpur which is the avowed purpose of the Act.
9. In order that the Nagpur Improvement Trust becomes a local authority, it will have to be seen if it is legally entitled to or entrusted by the Government with the control and management of a municipal or local fund. It has already been pointed out by reference to Section 83 that the Corporation has to contribute from its municipal fund a definite sum in favour of the Nagpur Improvement Trust. The reference to other provisions more particularly Chapter VIII would highlight that at least a part of the municipal fund is at disposal of the Nagpur Improvement Trust and that the said fund is entrusted by the Government and is controlled by the Nagpur Improvement Trust. Thus, Section 83 is a major step which provides that the part of the municipal fund is entrusted to the Nagpur Improvement Trust for being dealt with by it for the purposes of fulfilling the objectives of betterment of city of Nagpur. There is no doubt that thus the Nagpur Improvement Trust could be safely called a 'local authority' as it is legally entitled to the control and/or management of the municipal fund. The words 'other authority' used would aptly apply to the Nagpur, Improvement Trust which is nothing but a child of the Act and is entitled to and entrusted by the Government with the control or management of the municipal or local fund. For that reason, the provision in Section 81 of creating the trust fund and the said trust fund being placed to the credit of the Nagpur Improvement Trust would undoubtedly show that the Trust is also entitled to control or manage the local fund.
10. In the case of Union of India v. R. C. Jain (cited supra), the Supreme Court was called upon to decide as to whether the Delhi Development Authority was a local authority within the purview of the Payment of Bonus Act, 1965. Section 32 of the Act provided that no provision of Payment Bonus Act was applicable to the employees employed by an establishment engaged in any industry carried on by or under the Authority of any department of the Central Government or State Government or a local authority. The question there was whether the employees of the Delhi Development Authority were entitled to the bonus under the Payment of Bonus Act in the wake of Section 32 which exempted the local authorities from the operation of the Act. The Supreme Court, therefore, was called upon to decide this question. The High Court had allowed the Writ Petition holding that the Delhi Development Authority was liable to pay the said bonus. This judgment of the High Court was challenged and the Supreme Court, therefore, had the task of examining the provisions of Delhi Development Act as the Delhi Development Authority was nothing but the child of Delhi Development Act, 1957. There also the 'local authority' was not defined in the Payment of Bonus Act, 1965 and the Supreme Court was, therefore, deciding as to what is the magnitude of the term 'local authority'. The following observations would aptly point out the principles which were applicable in deciding as to whether a particular institution was a local authority or not (at pp. 952, 953) :
".....What then are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with providing amenities to the inhabitants of the locality, like health and education services, water and sewerage, town planning and development, roads, markets, transportation, social welfare services, etc. etc. Broadly we may say that they may be entrusted with the performance of civic duties and functions which would otherwise be Governmental duties and functions. Finally, they must have the power to raise funds for the furtherance of their activities and the fulfilment of their projects by levying taxes, rates, charges, or fees. This may be in addition to moneys provided by Government or obtained by borrowing or otherwise. What is essential is that control or management of the fund must vest in the authority."
The Supreme Court further relied upon the observations made by Hidayatullah, J. as he then was in Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills, Delhi wherein while considering the attributes of the local bodies, it was held that (at p. 1254) :
"Local bodies are subordinate branches of Government activity. They are democratic institutions managed by the representatives of the people. They function for public purposes and take away a part of the Government affairs in local areas. They are political sub-divisions and agencies which exercise a part of State functions. As they are intended to carry on local self-government the power of taxa-tion is a necessary adjunct to their other powers. They function under the supervision of the Government."
Applying these principles, the Apex Court took the resume of the provisions of the Delhi Development Act, 1957 and found in paragraph 6 that the Delhi Development Authority was constituted for specific purpose of the development of Delhi according to plan. The learned Judges held that the planned development of towns was a Governmental function which was traditionally entrusted by the various Municipal Acts in different States to municipal bodies. With growing specialisation along with the growth of titanic metropolitan complexes, legislatures have felt the need for the creation of separate town-planning or development authorities for individual cities. The learned Judges further held that the Delhi Development Authority was one such authority to which was entrusted by a Statute a Governmental function ordinarily entrusted to municipal bodies and important feature of the entrustment of Governmental function was the power given to the authority to make regulations which are required to be laid before the Parliament. The power to make regulation was analogous to the power ususally given to municipality to frame bylaws. It was further found that the activity of the authority was limited to the local area of Union Territory of Delhi. The Court further found that there was an element of popular representation in the constitution of the authority and the representatives of the inhabitants of the localities figured amongst the members. On the question of autonomy, the learned Judges held that within the bounds of the supervisory control of the Central Government, authority enjoyed a considerable degree of autonomy. As a last finding, it was found that the Legislature had vested the Delhi Development Authority the power of taxation also. In paragraph 11 while considering the question whether there was a taxing power in the Authority, the learned Judges made reference to Section 23. In that case, a criticism was levelled that the fund under Sections 23 was not a local fund as no part of it flowed directly from the taxing power vested in the Delhi Development Authority. It was further contended that the fees collected under Section 12 of the Act and the charges levied under Section 37 of the Act did not partake the character of tax but were mere fees which were the quid pro quo for the services which were required to be performed by the Delhi Development Authority, under the Act. Repelling this argument, ihe Court observed (at p. 956):--
".....We are unable to agree with the submission made on behalf of the respondents. In the first place when it is said that one of the attribules of a local authority is the power to raise funds by the method of taxation, taxation is to be understood not in any fine and narrow sense as to include only those compulsory exactions of money imposed for public purpose and requiring no consideration to sustain it, but in a broad generic sense as to also include fees levied essentially for services rendered . It is now well recognised that there is no generic difference between a tax and a fee; both are compulsory exactions of money by public authority. In deciding the question whether an authority is a local authority, our concern is only to find out whether the public authority is authorised by Statute to make a compulsory exaction of money and not with the further question whether the money so exacted is to be utilised for specific or general purposes. In the second place the Delhi . Development Authority is constituted for the sole purpose of the planned development of Delhi and no other purpose and there is a merger, as it were, of specific and general purposes. The statutory situation is such that the distinction between tax and fee has withered away. In the third palce we see no reason to hold that the charge contemplated by Section 37 is a fee and not a tax.....
What is more important, nor is there any question of any correlation between the betterment charge and the expenditure incurred by the Authority in carrying out the purposes of the Act. The charge is not levied on the basis of the expenditure incurred. It is levied on the basis of the increase in the value of the property consequent on the development of the area; one may say the charge is on the accrued capital gain; it may bear no proportion whatsoever to the cost of development."
On the basis of these observations, the Supreme Court went on to hold that the Delhi Development Authority was a 'local authority' and, therefore, its employees could not claim bonus under the Payment of Bonus Act, 1965.
11. It will be seen that applying all these principles to the provisions of the Nagpur Imporvement Trust Act, the provisions are almost identical. I have already shown that the Nagpur Improvement Trust is a child of the Nagpur Improvement Trust Act, 1936. The object of the Act is to make provision for improvement and extension of the town of Nagpur. Thus, it is not a mere Governmental agency but is a local independent entity. Secondly, Nagpur Improvement Trust functions in a defined area inasmuch as it extends to area comprised within the limits of city and to such other areas outside those limits as the State Government may from time to time by notification declare. The provisions in Chapter II have already been highlighted by me to show that out of the 9 trustees one is a Chairman of the Standing Committee of the Corporation and is thus an elected representative. Secondly, he is also a Councillor of the Corporation and is, therefore, again an elected person. One is the Member of the Legislative Assembly. These 3 persons are the elected representatives of the people. Out of the 4 persons who are to be appointed under sub-section (2), 2 persons are to be the non-officials who are residing within the limits of the area to which this Act applies and thus the majority of the 9 trustees have a representative character inasmuch as they represent the people of Nagpur city. Applying the third principle regarding the autonomy, I have already shown from the provisions of the Act that the Nagpur Improvement Trust acts though under the supervision and control of the State of Maharashtra but enjoys a complete autonomy in respect of the planning or the betterment and improvement schemes as also the executions thereof. Though there is a control of the State Government all the same there is a definite autonomy enjoyed by the Trust not only in respect of its functions but also in respect of its establishment and the staff. The Trust also has under Section 59 the powers to acquire land. Thus, it is an autonomous body which has a freedom to decide for itself the question of policy affecting the area administered by it. It may not be a complete autonomy but it has appreciable measure of autonomy in terms of the principles laid down by the Supreme Court. To fit in the next parameter pointed out by the Supreme Court in paragraph 2, the Nagpur Improvement Trust is entrusted with Governmental functions and duties which are usually entrusted to the municipal bodies. I have already pointed out from the provisions of the Act that Chapter V of the Act speaks of the duties of the Trust. Its functions are to make surveys of the land for carrying out the purposes of the Act. The Trust under Chapter IV has to frame improvement schemes and the types of improvement as provided by Section 27 are the general improvement, rebuilding of the houses, re-housing schemes, street schemes, development schemes, housing accommodation schemes, etc. It afso includes the drainage including sewerage disposal schemes. Thus, it has the functions which are entrusted to the municipal bodies and it could be said broadly that the Nagpur Improvement Trust is entrusted with the performance of civic duties. Finally, applying the principles, the Nagpur Improvement Trust has the power to raise funds for the furtherance of their activities. Provisions in Chapters VII and VIII starting from Section 77 onwards up to Section 88 speak of the financial powers of the Nagpur Improvement Trust. Section 81 provides for the forming a Trust Fund. The Trust can earn by way of cost management. It can earn by way of betterment contributions, moneys received on account of the loans takpn by the Trust, the proceeds of sale of any land vested in the Trust, the premia received by the Trust in connection with the leases for the term exceeding 40 years and the moneys resulting from the sale of securities. It can earn on revenue account which has been provided under Section 82-E. In addition to this, as has already been pointed out, the Nagpur Improvement Trust has a direct nexus with the municipal fund or the corporate fund of the Nagpur Municipal Corporation and every year the Corporation has to contribute the part of the fund depending upon the value of the houses within the area to which the Nagpur Improvement Trust Act applies. Thus, the Nagpur Improvement Trust has necessarily to deal with control and manage the municipal fund also. Considering all this together, it will have to be held that the Nagpur Improvement Trust is a 'local au-throity'. Once it is held as a 'local authority', then the provisions of Section 47 of the Ceiling Act would apply with all force and, therefore, all the properties owned by it or even the properties leased by it to someone else would partake the character of the exempted land. It will be remembered that area of 36.44 acres was acquired by the Trust, from Fulchand. Out of this 27.30 acres of area was leased back to Fulchand. The Authorities below have included this area within the ceiling area of the landholder. Obviously this is incorrect. The land which was owned by the Nagpur Improvement Trust will have to be excluded from the ceiling area of the landholder.
12. Lastly, Shri Deshpande contended that there was no proper enquiry on the question of uncultivable land also. Considering the order of the Maharashtra Revenue Tribunal, it does not seem that there was any non-application of mind in respect of the Potkharab area. However, considering the fact that the whole enquiry is being ordered afresh, the Surplus Land Determination Tribunal will also enquire into the extent of uncultivable land held by the petitioners and give an oppprtunity to the petitioners to produce such evidence as advised.
13. In the result, the petition succeeds. The orders passed by the Maharashtra Revenue Tribunal and the Surplus Land Determination Tribunal are set aside and the matter is remanded to the Surplus Land Determination Tribunal for fresh enquiry. However, the fresh enquiry shall be made in the light of the observations made by this Court. The rule is, therefore, made absolute in the terms stated above. In the circumstances of the case, there shall be no orders as to costs.
14. Petition allowed.