Supreme Court clarifies “Economic Holding” under Bombay Tenancy Act: Kesha v. Muralidhar (2023)

Introduction

Date of the Judgment: 19 October 2023

Citation: 2023 INSC 939

Judges: S. Ravindra Bhat, J. and Aravind Kumar, J.

Can a landlord reclaim leased land for personal cultivation if they own other agricultural land? The Supreme Court of India recently addressed this question, clarifying the definition of “economic holding” under the Bombay Tenancy and Agricultural Lands Act, 1948. This judgment resolves a long-standing dispute between a landlord and tenant regarding land resumption rights. The bench comprised of Justice S. Ravindra Bhat and Justice Aravind Kumar, with the majority opinion authored by Justice Aravind Kumar.

Case Background

The case involves a dispute over land leased by Keshav Bhaurao Yeole (the landlord) to Murlidhar Damodar Modhave, Bhausaheb Damodar Modhave, and Kundalik Damodar Modhave (the tenants) through two separate lease deeds dated 30 August 1962. The first lease, for Survey No. 291 (26 acres 13 guntas), was specifically for sugarcane cultivation. The second lease, for Survey No. 290/1 & 290/2 (8 acres 21 guntas), was for general cultivation. Both leases were for a period of 13 years.

Upon the expiration of the lease, the landlord issued a notice on 5 September 1975, to terminate the tenancy and reclaim the land for personal cultivation, stating that the tenanted land was their primary source of income. It’s important to note that this notice only pertained to Survey No. 291, and no separate notice was issued for Survey No. 290/1 & 290/2.

When the tenants did not relinquish possession, the landlord initiated proceedings before the Court of Tenancy Awal Karkun, Rahuri, seeking to recover possession of all the leased lands, i.e., Survey No. 291 and Survey No. 290/1 & 290/2.

Timeline

Course of Proceedings

The original authority framed four issues, finding that the landlord owned the land, the tenants were valid tenants, the termination notice was valid, and the landlord required the land for personal cultivation. The original authority ordered the restoration of 22 acres of the suit land to the landlord, aiming for equal land holdings between the landlord and tenants.

Both the landlord and tenant appealed. The appellate authority upheld the original authority’s findings but modified the extent of land to be restored to 17 acres 17 guntas, correcting a misinterpretation of Section 31B of the Act.

The revisional authority, upon tenant’s revision application, noted that the termination notice was only for Survey No. 291 and that the original authority should have framed an issue on the applicable notification (14.2.1958 or amended on 8.10.1969). It remanded the case to the original authority to frame issues under Sections 31A to 31D of the Bombay Tenancy Act, 1948, specifically for Survey No. 291.

The High Court, in writ proceedings, set aside all lower court orders and remanded the case to the original authority, directing it to consider the bonafide requirement of the landlord’s heirs in light of the landlord’s death, relying on Maruti Namdeo Gade v. Dattatraya Maval and Hariba Keshav Barbole v. Motibhai Deepchand.

Legal Framework

The judgment refers to several sections of the Bombay Tenancy and Agricultural Lands Act, 1948, and notifications issued under it. Key provisions include:

• Section 2(2D): Defines “ceiling area” as the area of land fixed under Sections 5 or 7.
• Section 2(6A): Defines “economic holding” as the area of land fixed under Sections 6 or 7.
• Section 5: Specifies the ceiling area of land.
• Section 6: Specifies the economic holding of land.
• Section 31: Outlines a landlord’s right to terminate a tenancy for personal cultivation, subject to Sections 31A to 31D.
• Section 31A: Specifies conditions for terminating a tenancy for personal cultivation.
• Section 31B: Restricts termination of tenancy if it leaves the tenant with less than half the leased land or contravenes the Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947.
• Section 33B: Details special rights of a certificated landlord to terminate tenancy for personal cultivation.
• Section 43A: Exempts certain leases, including those for sugarcane cultivation, from specific provisions of the Act.

The court also considers the amended notification dated 08 October 1969, issued under Section 43A(3), which states that if a landlord’s holding does not exceed one economic holding and their livelihood is primarily from agriculture, the conditions in Sections 31A and 31B do not apply. Instead, the landlord’s right to resume land is subject to Section 33B(5)(b) and (c).

The court also refers to the Maharashtra Land Revenue Code, 1966, specifically the definition of “to hold land” as “to be lawfully in possession of land, whether such possession is actual or not.”

Arguments

Landlord’s Arguments:

• The High Court erred in relying on Maruti Namdeo Gade and Hariba Keshav Barbole, as the relevant date for determining bonafide requirement is the date of filing the application, not subsequent events like the landlord’s death.
• The revisional authority exceeded its jurisdiction by disturbing the finding that the landlord’s holding did not exceed one economic holding.
• Even if the land leased was not for sugarcane cultivation, the total holding of both landlord and tenant should be considered to determine the extent of land to be resumed under Section 33B(5)(b).

Tenant’s Arguments:

• The notice was only for Survey No. 291, and therefore, the scope of adjudication should be limited to that land.
• The High Court and revisional authority were correct in remanding the case because the facts necessary to decide if the landlord’s holding exceeded one economic holding were not available on record.
• The landlord had other lands and non-agricultural income, which should be inquired into, and the landlord’s holding was in excess of one economic unit, requiring the application of Sections 31A-31D.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the holding of the landlord exceeds one economic holding and whether the landlord earns his livelihood principally by agriculture or by agricultural labour?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court considered the following authorities:

The Court also considered the following legal provisions:

• Section 2(2D) of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 2(6A) of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 4B of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 5 of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 6 of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 7 of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 29 of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 31 of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 31A of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 31B of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 33B of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 43A of the Bombay Tenancy and Agricultural Lands Act, 1948
• Section 2 (12) of the Maharashtra Land Revenue Code, 1966

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Maruti Namdeo Gade v. Dattatraya Maval [CITATION] and Hariba Keshav Barbole v. Motibhai Deepchand [CITATION]: The Court held that the High Court erred in relying on these cases, stating that the relevant date for determining bonafide requirement is the date of filing the application.
• Bhavani Housing Cooperative Society v. Bangalore Development Authority [CITATION]: The Court followed this case to import the definition of “to hold land” from the Maharashtra Land Revenue Code, 1966, into the Bombay Tenancy Act, 1948.
• Devidas Narayan More v. Chunnilal Bhailal Wani [CITATION]: The Court followed the interpretation of Section 33B(5)(b) as laid down in this case to calculate the land to be restored to the landlord.
• Gaya Prasad v. Pradeep Srivastava [CITATION]: The Court relied on this case to hold that the crucial date for determining the bonafides of the requirement of the landlord is the date of his application for eviction.
• Shakuntala Bai v. Narayan Das [CITATION]: The Court relied on this case to support the principle that events occurring after the date of application for eviction have no bearing on the issue of bonafide requirement.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Interpretation of “Economic Holding”: The Court emphasized that “economic holding” should only include land owned or held as a tenant, not land leased out to others. This interpretation was crucial in determining that the landlord’s holding did not exceed one economic unit.
• Applicability of Amended Notification: The Court found that the landlord’s principal source of income was agriculture, and their holding did not exceed one economic holding. This triggered the application of Section 33B(5)(b) instead of Sections 31A-31D.
• Focus on the Date of Application: The Court held that the bonafide requirement should be determined based on the date of the application, not subsequent events like the landlord’s death.
• Adherence to Legal Principles: The Court followed the principles laid down in Devidas Narayan More v. Chunnilal Bhailal Wani for calculating the land to be restored to the landlord.

Fact:Law Ratio

The court’s reasoning was a blend of factual analysis (assessing the landlord’s holding and income) and legal interpretation (applying the relevant provisions of the Bombay Tenancy Act and the amended notification). The legal considerations slightly outweighed the factual aspects in the court’s decision-making process.

Logical Reasoning:

The Court rejected the interpretation that the land leased to the tenant should be included in the calculation of the landlord’s holding. The Court also rejected the argument that subsequent events, such as the landlord’s death, should affect the determination of bonafide requirement. The final decision was reached by applying the correct legal provisions and precedents to the established facts.

The Court reasoned that the High Court was incorrect in remanding the case, as the bonafide requirement should be determined based on the date of the application, not subsequent events. The Court also found that the revisional authority could have decided the issue of whether the landlord’s holding exceeded one unit of economic holding, instead of remanding the case to the original authority.

The Court held that the landlord was entitled to 8.34 Acres in Survey No. 291. The Court relied on the principle laid down in Devidas Narayan More v. Chunnilal Bhailal Wani, where it was held that the tenancies must be terminated, the landlord and “the tenant holding thereafter in the total an equal area for personal cultivation”.

The Court also held that the crucial date for deciding the bona fides of the requirement of the landlord is the date of his application for eviction. Events occurring subsequent to this date have no bearing on the issue as to whether the eviction was a bona fide requirement.

“According to Section 33(B)(5)(b), the landlord’s entitlement to terminate tenancy and recover possession of land leased is only to the extent ‘of so much thereof as would result in both the landlord and the tenant holding thereafter in the total an equal area for personal cultivation’.”

“The tenant may hold land for personal cultivation from three sources: (a) land which he himself owns; (b) land which is let out to him by his landlord or (c) land which is let out to him by another landlord or another certificated landlord.”

“The original authority has recorded a finding that the landlord’s principal source of income is from agriculture. This finding has not been disturbed or challenged by the appellate authority or the revisional authority.”

There were no dissenting opinions in this case. The judgment was delivered by a bench of two judges.

Key Takeaways

• The definition of “economic holding” under the Bombay Tenancy Act includes only land owned or held as a tenant, not land leased out.
• If a landlord’s holding does not exceed one economic holding and their principal source of income is agriculture, the provisions of Section 33B(5)(b) apply for land resumption, not Sections 31A-31D.
• The date for determining the bonafide requirement of a landlord is the date of the application, not subsequent events.
• The principle laid down in Devidas Narayan More v. Chunnilal Bhailal Wani is to be followed for calculating the land to be restored to the landlord.

Directions

The Supreme Court directed the jurisdictional tehsildar to handover physical possession of 8.34 Acres in Survey No.291 to the appellants within three months from the date of receipt of the order. The Court also stated that the appellants would be entitled to proceed against the respondents in respect of Survey No.290/1 and 290/2 in accordance with law and contentions of both parties are kept open.

Development of Law

The ratio decidendi of this case is that the term “economic holding” as defined in the Bombay Tenancy and Agricultural Lands Act, 1948, includes only the land that is owned or held as a tenant, and not the land that has been leased out to other tenants. The Court also clarified that the date for determining the bonafide requirement of a landlord is the date of the application for eviction, and not any subsequent date. The Court upheld the principle that the calculation of land to be restored to the landlord should be done based on the formula laid down in Devidas Narayan More v. Chunnilal Bhailal Wani. This judgment clarifies the interpretation of key provisions of the Bombay Tenancy Act, providing guidance on land resumption rights.

Conclusion

The Supreme Court allowed the appeal in part, setting aside the High Court’s order and holding that the landlord’s heirs were entitled to 8.34 acres in Survey No. 291. The Court clarified the definition of “economic holding,” emphasized the importance of the date of application for determining bonafide requirement, and applied the principle laid down in Devidas Narayan More v. Chunnilal Bhailal Wani for calculating the land to be restored to the landlord. The judgment provides clarity on land resumption rights under the Bombay Tenancy Act and settles a long-standing dispute.