Calcutta High Court
Biswanath Khan And Ors. vs Prafulla Kumar Khan on 9 March, 1988
Equivalent citations: AIR1988CAL275, [1989]66COMPCAS452(CAL), 92CWN1017, AIR 1988 CALCUTTA 275, (1988) 92 CAL WN 1017, (1988) 1 CALLJ 328, (1991) COMNR 273, (1988) 1 RENCJ 572, (1988) 1 RENTLR 718
JUDGMENT A.M. Bhattacharjee, J.
1. A Company, which was a thika tenant under the plaintiff-appellants in respect of the disputed land, has been dissolved Would the tenancy stand extinguished and the land revert to the landlords or would the tenancy vest in the State by escheat or as bona vacantia? These are the questions that have arisen for our consideration in this second appeal and having considered them with the very able assistance from the learned counsel for the parties, we propose to return a negative answer to the first question and an affirmative answer to the second.
2. So far this Court is concerned, it was observed by P.B. Mukharji, J. (as his Lordship then was) in U.N. Mandal's Estate Pvt. Ltd., that "the assets of a dissolved Company are not without owner" as "the State takes them over". It was pointed out further that though there is no provision in the Indian Companies Act, corresponding to Section 354 of the English Companies Act of 1948, providing expressly that the property of a dissolved Company would be bona vacantia, the position was not different as in England also the doctrine of bona vacantia applied to the property of a dissolved company independently of, and, for the matter of that, even before the enactment of, such Statutory provisions. The doctrine of bona vacantia or escheat was declared to be a part of the law in India by the Privy Council as early as in 1860 in Collector of Masulipatam v. Cavary Vancata Narrainappah, (1859-61) 8 Moo Ind App 500 at PP. 525, 526, 527.
3. Not that such a doctrine was unknown in India for our ancient law-giver Manu, for example, declared more than 2000 years ago thus in Manusawhita (Chapter IX, Verse 189) Aharajyam Brahmanadravyam Rajna Nityamiti Sthiti, Itareshantu Varnanam Sarbabhave Harenripa. This, while negativing the King's right to Brahminical property even on failure of all heirs, affirmed the King's title to all the properties belonging to persons of other classes dying leaving without any heir. The Privy Council, however, observed in Collector of Masulipatam, (8 Moo Ind App 500) (supra, at p. 525) that though under the British legislations. Hindu Law was to be administered in the case of succession to properties of a Hindu dying intestate, it was to be so administered only when he had any heir to succeed thus providing occasion for private succession. But on a total failure of all private heirs, the properties and the succession thereto ceased to be governed by any Personal Law of Succession and, therefore, a case of a Hindu, whether a Brahmin or a non-Brahmin, dying leaving no heirs, was not to be governed by the Sastric Hindu Law as enunciated by Manu, but was to be governed by the General Law of universal application and that General Law was that "private ownership not existing, the State must be the owner as the ultimate Lord". This right to acquire by way of escheat or as bona vacantia is not a creature of any Private Law of Succession but is an attribute of Sovereignty. It is true that Statutory provisions of Private Law of Succession, e.g., Section 29, Hindu Succession Act, 1956, some times expressly recognise right of the State to acquire properties by escheat or as bona vacantia. But that right would have been very much there even without any such provisions.
4. Be that as it may, once it is held, as held in U.N. Mandal's Estate (supra) that properties of a dissolved Corporation were to vest in the Crown by way of bona vacantia under the General Law as administered in India even before the commencement of the Constitution, then there would be no doubt that such properties, when situate in a State, would now vest in such State because of the provisions of Article 296 of the Constitution, which reads as hereunder : -
"Subject as hereinafter provided, any property in the territory of India which, if this Constitution had not come into operation, would have accrued to His Majesty or, as the case may be. to the Ruler of an Indian State by escheat or lapse or as bona vacantia for want of a rightfulowner. shall, if it is property situate in a State, vest in such State, and shall, in any other case, vest in the Union".
And the Supreme Court has now with reference to this Article 296, ruled in Pierce Leslie and Co. Ltd. v. Violet Ouchterlong Waoshare, that "property of an intestate dying without leaving lawful heirs and the property of a dissolved Corporation passes to the Government by escheat or as bona vacantia". And relying on this decision, the Supreme Court in Narendra Bahadur Tandon v. Shanker Lal, has reiterated that "in India the law is well-settled that the property of an intestate dying without leaving lawful heirs, and the property of a dissolved Corporation, passes to the Government by escheat or as bona vacantia" and that "if the Company had a subsisting interest in the lease on the date of dissolution, such interest much necessarily vest in the Government by escheat or as bona vacantia".
5. This position in law had not been, as it obviously cannot be, disputed by Mr. Dasgupta, the learned Counsel for the appellants-landlords. But he has, however, urged that only such property can accrue to the State by escheat or as bona vacantia which was and could be subject of absolute ownership in the hands of the fast holder and therefore, the tenancy interest of the dissolved Company in this case, being that of a thika tenant under the Calcutta Thika Tenancy Act, 1949, could not vest in the State on the dissolution of the Company but must have reverted back to the landlords. The limited interest of such a tenant cannot, according to Mr. Dasgupta, accrue to the State by escheat or as bona vacantia.
6. It should be noted that in Pierce Leslie (supra) the Supreme Court has ruled that "the Government has a right to take all property within its jurisdiction by escheat for want of a heir or successor or as bona vacantia for want of a rightful owner" and in Narendra Bahadur (supra, at p. 578) has ruled that "the property of a dissolved Corporation passes to the Government by escheat or as bona vacantia". Now, the word "property", when used without any qualification or limitation, as above, is a term of the widest import, and as observed by the Supreme Court in J.K. Trust v. Commr. of I.-T., , "it signifies every possible interest which a person may acquire". There should, therefore, be no doubt that the expression "property" used without any qualification or limitation would include a tenant's interest in the demised land or premises. It is not disputed that the interest of a thika tenant under the Calcutta Thika Tenancy Act, 1949, is heritable as well as transferable and it would be trite to say that only owner of a property, however limited, can transfer or transmit the same. Reference may be made to the decision of the Supreme Court in Municipal Corporation of Greater Bombay v. Lala Pancham, where it has been held that the tenant has, under the Transfer of Property Act or the Rent Control Legislations, an interest in the demised premises which would squarely fall within the expression "property". We would accordingly hold that the interest of a thika tenant, however limited it otherwise may be, is a "property" which would accordingly be liable to be vested in the State by escheat or as bona vacantia.
7. The course of legislations would also show that such tenancy interest has all along been treated to be liable to accrue to the State by escheat or as bona vacantia and that is why suitable legislative provisions to the contrary had to be and have been expressly made in various legislations to provide that it would not so vest. Reference may be made to the provisions of Section 26 of the Bengal Tenancy Act of 1885 (now repealed) which had to provide that "in any ease in which under the law of inheritance to which the raiyat is subject, his other property goes to the Crown, his right of occupancy shall be extinguished". Reference may also be made to the proviso to Section 7(5) of the West Bengal Non-agricultural Tenancy Act, 1949, which has also provided that "in any case in which under the law of inheritance to which such tenant is subject, his other property goes to the Government, his interest in such land shall be extinguished". The expression "other property" in those Statutory provisions would unmistakably demonstrate that the concerned Legislatures have all along treated such tenancy interest, howsoever limited, as property analogous to all other property and being fully alive to the fact that such tenancy interest would have accrued to the Government by escheat or as bona vacantia on failure of heirs, has had to provide for its prevention. The point appears to have been clinched so far thika tenancy is concerned by the provisions of Section 11 (now repealed) of the Calcutta Thika Tenancy Act, 1949 which also similarly provided that "in any case in which under the law of inheritance to which the thika tenant is subject, his other property goes to the Crown, his interest in the holding shall be extinguished". It is, therefore, manifest that the interest of a thika tenant is also a property like any other property and would have accrued to the Government, but for the express provisions in Section 11. And now that the said Section 11 is repealed by the Amendment Act of 1953, there cannot be any doubt that the interest of a thika tenant, even if a limited one, is liable to be vested in the Government by escheat or as bona vacanta like his all other properties there being now no such provision preventing such vesting as was in the repealed Section 11.
8. Actually Section 11 of the Calcutta Thika Tenancy Act and other analogous provisions providing for extinction of the tenancy on the tenant dying intestate without any heir and reversion of the land to the immediate landlord enacted the principle of English feudal law whereunder tenancies in lands were to revert back to the mesne feudal lords and not to the ultimate Lord, that is, the Crown. But for the express Statutory provisions as noted above, this rule of English feudal law providing for reversion to the mesne lords was not applicable in India as was pointed out by the Privy Council as early as in 1876 in Ranee Sonet Kower v. Mirza Himmat Bahadur, (1876) 3 Ind App 92 at p. 101 and by the Supreme Court as late as in 1968 in Pierce Leslie (supra) and it is in the fitness of things that the provisions in Section 11 of the Calcutta Thika Tenancy Act, 1949 was repealed in 1953 to make the relevant law in consonance with the avowed object of our State to abolish all mesne or intermediary interests.
9. Mr. Dasgupta has very strongly relied on a Full Bench decision of the Allahabad High Court in Tulshi Ram v. Gur Dayal, (1911) ILR 33 All 111 at p. 116) where it was held that the tenancy in respect of a cultivatory holding "is but a limited interest, which can not be the subject of escheat to the Crown." But this observation must be read in the context of Section 18 of the Agra Tenancy Act, 1901 governing the case which provided that on the tenant leaving no heirs, his interest in the tenancy, described in the Act as a right of occupancy, way estinguished, and the right of tenancy thus having been extinguished, there could be nothing to accrue to the Government by way of escheat or as bona vacantia. In fact, the Supreme Court has also in Narendra Bahadur (supra) distinguished this Allahabad decision on this ground. In Ranee Sonet Kowar, (3 Ind App 92) (supra) the Privy Council was dealing with a Mokarari tenure which was held to have conferred an absolute interest to the tenure-holder and some observations in that decision might give rise to the impression that only such properties would be liable to accrue by way of escheat or as bone vacantia as were or could be held in absolute ownership, as we have already indicated, we can not find any justification to give any such qualified, limited or circumscribed , meaning to the expression property for the purpose of devolution by way of escheat or as bona vacantia and, as already noted, the decision of this Court in U.N. Mandal's Estate, (supra) and those of the Supreme Court in Pierce Leslie, (supra) and in Narendra Bahadur (supra) leave no room for doubt that anything that can jurisprudentially be treated to be property would, unless otherwise expressly provided by law, be liable to vest in the Government by way of escheat or as bona vacantia and if in the Privy Council decision in Renee Sonet Kowar (supra), there are observations to the contrary, those can no longer be regarded to have laid down good law. The legislative background in which Ranee Sonet Kowar (supra) was decided has also undergone considerable changes and, as we have already indicated hereinbefore, the course of legislations in the relevant provisions of the Bengal Tenancy Act of 1885, the West Bengal Non-Agricultural Tenancy Act of 1949, the Calcutta Thika Act of 1949, noted hereinabove, would manifest that the concerned legislatures have all alone treated tenancy rights as property liable to be vested in the Government by escheat or as bona vacantia and have endeavoured to prevent such vesting by express legislative provisions to the contrary. We would accordingly hold that on the dissolution of the Company, to which the suit land was leased out in thika tenancy, the same vested in the State of West Bengal by escheat or as bona vacantia as the provisions of Section 11 of the Calcutta Thika Tenancy Act, which could have prevented such vesting, already stood repealed in 1953.
10. And once we hold, as we do, that the thika tenancy of the company vested in the State by escheat or as bona vacantia, we would have to hold further that the suit by the landlords-appellants for the recovery of the possession of the lands comprised in the tenancy would fail as it could not proceed without the State as a party defendant. The State was obviously a necessary party and, as has now been made clear by the proviso added to Section 99 of the Code of Civil Procedure by the Amendment Act of 1976, the curative antidote in that Section cannot cure a defect of non-joinder of a necessary party.
11. Further, the landlords have sued the defendant on the allegation that their quondam thika tenant, i.e., the Company to which the suit land was let out, stood dissolved and the defendant is now occupying the suit land as a trespasser. But once we hold that the thika tenancy granted by the plaintiff in favour of the Company in respect of the suit land was not extinguished in spite of its dissolution but has vested in the State, the plaintiffs as landlords would not, so long the tenancy now vested in the State subsists, be entitled to sue the defendant as one having trespassed on the tenanted land. In Rahim Bux v. Osman Gani, AIR 1948 Cal 71 a Division Bench of this Court. Speaking through B.K. Mukherjea, J. (as his Lordship then was), has pointed out that "it cannot be disputed as general proposition of law that adverse possession against the tenant is not adverse against the landlord during the continuation of the lease". As pointed out by us in a rather recent decision in Gold Leaf Tea Co. v. Tribeni Tissues Ltd., 1987 Cal LT (HO 327 at p. 331, with reference to Rahim Bux (supra) and the observations made in U.N. Mitra's Tagore Law Lectures on Limitation and Prescription (3rd Edition, page 161), this view is based on the principle that possession cannot be adverse to one who has no immediate right to possession and since a landlord does not have any such right in respect of the tenanted property during the subsistence of the tenancy, he does not acquire any right of action against the trespasser encroaching upon the tenanted property. It is true that in Gold Leaf Tea Co. (supra) we have also held further that the trespasser, while adversely possessing the tenanted property, may also in given case assert an adverse title against the landlord also and that when such is the case, the landlord would also acquire a right to sue the trespasser even during the currency of the tenancy, as otherwise on the expiry of the Statutory period, the title of the trespasser would become complete not only against the tenant but against the landlord also. The old Division Bench decision of this Court in Bindubasani v. Jahnavi, (1909) 13 Cal WN 303, to which our attention has been drawn by Mr. Dasgupta, took such a view and proceeded on the basis that the ouster of the tenant in that case amounted lo the ouster of the landlord also who could accordingly sue the trespasser directly without joining the ousted tenant. As we have already held, the thika tenancy of the Company has now vested in the State and the State not having been made a party in this case, it is not possible to effectively determine as to whether and to what extent the land now in the tenancy of the State has been trespassed upon by the defendant and even if it has been trespassed, whether such trespass has already been adverse to or has amounted to ouster of the plaintiffs-landlords has otherwise adversely affected them to entitle them to sue the defendant for the recovery of the land, which > now stands tenanted to the State, during the subsistence of that tenancy. The suit, therefore, could not proceed without the State as a party defendant and must, therefore, fail in any view of the matter and the courts below were right in dismissing the same.
12. We would accordingly dismiss this appeal and affirm the decisions of the courts below but we would do so without any order as to costs.
13. There was a a cross-objection preferred by the respondent; but since that was not pressed at any stage during the hearing, the same also stands dismissed.
Ajit Kumar Nayak, J.
14.1agree.