Supreme Court Clarifies Restrictions on Agricultural Land Transfers via Wills: Vinodchandra Sakarlal Kapadia vs. State of Gujarat (2020)

Date of the Judgment: 15 June 2020

Citation: Civil Appeal No. 2573 of 2020 (Arising out of SLP (C) No. 18525 of 2009)

Judges: Uday Umesh Lalit, J., Indu Malhotra, J., A.S. Bopanna, J.

Can a farmer bypass restrictions on land transfers by simply writing a will? This was the central question before the Supreme Court in a recent case concerning the Bombay Tenancy and Agricultural Lands Act, 1948. The court examined whether the term “transfer” includes testamentary disposition, and if agricultural land can be bequeathed to a non-agriculturist.

Case Background

The case arose from a dispute over agricultural land in Gujarat. Samubhai Budhiabhai, a tenant farmer, became the deemed purchaser of the land he cultivated under the Bombay Tenancy and Agricultural Lands Act, 1948. On 24 January 1991, Samubhai executed a registered will, bequeathing the land to Vinodchandra Sakarlal Kapadia. Samubhai died on 2 February 1991, and Kapadia’s name was entered in the revenue records. However, revenue authorities found that Kapadia was not an agriculturist and initiated proceedings under Section 84C of the Act.

The Additional Mamlatdar declared the will invalid, stating it violated Section 63 of the Act, which restricts land transfers to non-agriculturists. This decision was upheld by the Deputy Collector. However, the Gujarat Revenue Tribunal reversed the order, stating that a will does not amount to a transfer. The State of Gujarat then challenged this decision in the High Court, leading to a referral to a larger bench which resulted in the present Supreme Court case.

Timeline

Legal Framework

The Supreme Court focused on Sections 43 and 63 of the Bombay Tenancy and Agricultural Lands Act, 1948.

✓ Section 43(1) restricts the transfer of land purchased by a tenant under the Act, requiring prior sanction from the Collector for any sale, gift, exchange, mortgage, lease, or assignment. It also restricts partitioning of such land without prior sanction of the Collector.

✓ Section 63(1) bars transfers of agricultural land to non-agriculturists through sale, gift, exchange, lease, or mortgage. It also restricts agreements for such transfers.

The Act aims to protect tenants and preserve agricultural land for agriculturists. It seeks to prevent the concentration of land in the hands of non-cultivators and ensure that land is used for agricultural purposes.

Arguments

Appellant’s Arguments:

• The appellants argued that Sections 43 and 63 of the Bombay Tenancy Act only prohibit transfers made between living persons (inter vivos), and not testamentary dispositions (through a will).
• They contended that the terms “sale,” “gift,” “exchange,” and “mortgage” in the Act indicate transfers by living persons.
• They argued that the term “assignment” in Section 43 should be interpreted in the same context as the other terms, and that the term “assignment” does not appear in Section 63.
• The appellants also submitted that the Indian Succession Act, 1925, a central legislation, should prevail over any conflicting state laws, as succession is a concurrent subject under the Constitution.
• They distinguished the Supreme Court’s decisions regarding the Karnataka Land Reforms Act, 1961, arguing that those provisions had received Presidential assent, unlike the Bombay Tenancy Act.

Respondent’s Arguments:

• The State of Gujarat argued that the Act’s primary goal is to protect actual cultivators and prevent land from falling into the hands of non-agriculturists.
• They submitted that Section 63 indicates that transfers to non-agriculturists are not allowed, and any transfer that results in holdings beyond ceiling limits is also impermissible.
• The State contended that these restrictions reveal the legislative intent, and that testamentary dispositions should also be subject to similar conditions.
• They argued that allowing testamentary transfers to non-agriculturists would defeat the purpose of the Act, which is to preserve agricultural land for agricultural purposes.

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether Section 63 of the Bombay Tenancy Act bars an agriculturist from transferring agricultural land to a non-agriculturist through a will.
2. Whether Section 43(1) of the Tenancy Act restricts the transfer of land purchased by a tenant through a will.
3. Whether the term “assignment” includes testamentary disposition.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court relied on the following authorities:

Cases:

• Sangappa Kalyanappa Bangi (Dead) through LRs. vs. Land Tribunal, Jamkhandi and others [AIR 1998 SC 3229] – Supreme Court: The court held that “assignment” includes testamentary disposition.
• Jayamma vs. Maria Bai (Dead) by proposed LRs and another [AIR 2004 SCW 4412] – Supreme Court: The court reiterated that “assignment” includes a will, and that the purpose of the legislation was to prevent land from going to strangers.
• State of Punjab (now Haryana) and others vs. Amar Singh and another [(1974) 2 SCC 70] – Supreme Court: This case was referred to by the High Court to show that the act intended to prevent indiscriminate conversion of agricultural land.
• Dayandeo Ganpat Jadhav vs. Madhav Vithal Bhaskar and others [(2005) 8 SCC 340] – Supreme Court: This case was also referred to by the High Court to show that the act intended to prevent indiscriminate conversion of agricultural land.
• State of W.B. v. Kailash Chandra Kapur [(1997) 2 SCC 387] – Supreme Court: This case was referred to by the appellant to show that devolution of property by way of a will does not amount to a transfer of the property.
• S. Rathinam alias Kappamuthu and Others v. L.S. Mariappan and Others [(2007) 6 SCC 724] – Supreme Court: This case was referred to by the appellant to show that a will is not a transfer but a mode of devolution.
• Mahadeo (Dead through legal representatives) vs. Shakuntalabai [(2017) 13 SCC 756] – Supreme Court: This case was held to be incorrectly decided for failing to notice earlier decisions.
• Timmakka Kom Venkanna Naik v. Land Tribunal [(1987) 2 Kant LJ 337] – High Court of Karnataka: This case was approved by the Supreme Court in Sangappa’s case, holding that testamentary disposition of tenancy rights is invalid.
• Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawala [(1986) 1 SCC 571] – Supreme Court: The court held that a tenant cannot bequeath his tenancy rights by will.
• Jaspal Singh v. Additional District Judge, Bulandshahr [(1984) 4 SCC 434] – Supreme Court: This case was cited to show that a tenant’s interest cannot be transferred to a stranger through a will.
• Dr. Anant Trimbak Sabnis v. Vasant Pratap Pandi [AIR 1980 Bombay 69] – High Court of Bombay: This case was cited to show that the words “assign” and “transfer” in a rent act include a bequest.
• Manchegowda vs. State of Karnataka [(1984) 3 SCC 301] – Supreme Court: This case dealt with restrictions on transfer of granted lands to Scheduled Castes and Tribes.
• Lingappa Pochanna Appelwar vs. State of Maharashtra and another [(1985) 1 SCC 479] – Supreme Court: This case discussed the restoration of land to Scheduled Tribes and the legislative competence of the State.
• Pandey Oraon vs Ram Chander Sahu and Others [(1992) Supp 2 SCC 77] – Supreme Court: This case held that the term “transfer” should be interpreted broadly to protect Scheduled Tribes.
• Amrendra Pratap Singh vs. Tej Bahadur Prajapati and Others [(2004) 10 SCC 65] – Supreme Court: This case defined “transfer” broadly to include any dealing that extinguishes a tribal’s right to property.
• State of Rajasthan and Others vs. Aanjaney Organic Herbal Private Limited [(2012) 10 SCC 283] – Supreme Court: This case held that the term “person” in the context of land transfers to Scheduled Castes and Tribes refers only to natural persons, not juristic entities.
• Rajasthan Housing Board vs. New Pink City Nirman Sahkari Samiti Limited and Another [(2015) 7 SCC 601] – Supreme Court: This case held that transactions violating Section 42 of the Rajasthan Tenancy Act are void ab initio.
• Shamjibhai Keshavjibhai Kansagra (Patel) & Ors. V . Principal Secretary, Revenue Dept. (Appeals) & Ors. [AIR 2011 Gujarat 55] – High Court of Gujarat: This case extended restrictions on land transfers to testamentary dispositions for tribal lands.
• Samatha vs. State of A.P . and Others [(1997) 8 SCC 191] – Supreme Court: This case discussed the importance of land to the livelihood and dignity of Scheduled Tribes.
• Welfare Association, A.R.P ., Maharashtra and Another vs. Ranjit P . Gohil and Others [(2003) 9 SCC 358] – Supreme Court: This case laid down the principles for interpreting the legislative competence of a statute.
• State of Maharashtra vs. Bharat Shanti Lal Shah and Others [(2008) 13 SCC 5] – Supreme Court: This case emphasized the liberal interpretation of legislative entries.
• Girnar Traders (3) vs State of Maharashtra and Others [(2011) 3 SCC 1] – Supreme Court: This case discussed the doctrine of pith and substance and the legislative competence of the State Legislature.

Statutes:

• The Bombay Tenancy and Agricultural Lands Act, 1948 – The primary statute under consideration.
• The Indian Succession Act, 1925 – Central legislation on succession, argued by the appellants to be relevant.
• The Karnataka Land Reforms Act, 1961 – The Supreme Court relied on previous judgments that interpreted the term assignment under this Act.
• The Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 – This Act was referred to in the case of Bhavarlal Labhchand Shah.
• The Rajasthan Tenancy Act, 1955 – This Act was referred to in the case of State of Rajasthan and Others vs. Aanjaney Organic Herbal Private Limited.
• The Maharashtra Restoration of Lands to Scheduled Tribes Act, 1974 – This Act was referred to in the case of Lingappa Pochanna Appelwar vs. State of Maharashtra and another.
• The Chhotanagpur Tenancy Act, 1908 – This Act was referred to in the case of Pandey Oraon vs Ram Chander Sahu and Others.
• The Bombay Land Revenue Code, 1879 – This Act was referred to in the case of Shamjibhai Keshavjibhai Kansagra (Patel) & Ors. V . Principal Secretary, Revenue Dept. (Appeals) & Ors.

Judgment

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

How each authority was viewed by the Court?

• Sangappa Kalyanappa Bangi (Dead) through LRs. vs. Land Tribunal, Jamkhandi and others [AIR 1998 SC 3229]*: Followed for the interpretation of “assignment” to include testamentary disposition.
• Jayamma vs. Maria Bai (Dead) by proposed LRs and another [AIR 2004 SCW 4412]*: Followed for reiterating that “assignment” includes a will.
• State of Punjab (now Haryana) and others vs. Amar Singh and another [(1974) 2 SCC 70]*: Referred to by the High Court to show that the act intended to prevent indiscriminate conversion of agricultural land.
• Dayandeo Ganpat Jadhav vs. Madhav Vithal Bhaskar and others [(2005) 8 SCC 340]*: Referred to by the High Court to show that the act intended to prevent indiscriminate conversion of agricultural land.
• State of W.B. v. Kailash Chandra Kapur [(1997) 2 SCC 387]*: Distinguished by the court stating that the case was not in the context of statutory prohibition.
• S. Rathinam alias Kappamuthu and Others v. L.S. Mariappan and Others [(2007) 6 SCC 724]*: Distinguished by the court stating that the case was not in the context of statutory prohibition.
• Mahadeo (Dead through legal representatives) vs. Shakuntalabai [(2017) 13 SCC 756]*: Overruled as it failed to notice earlier decisions and was inconsistent with the present ruling.
• Timmakka Kom Venkanna Naik v. Land Tribunal [(1987) 2 Kant LJ 337]*: Approved by the Supreme Court in Sangappa’s case for the interpretation of “assignment”.
• Bhavarlal Labhchand Shah v. Kanaiyalal Nathalal Intawala [(1986) 1 SCC 571]*: Followed for the principle that a tenancy cannot be willed away to a stranger.
• Jaspal Singh v. Additional District Judge, Bulandshahr [(1984) 4 SCC 434]*: Cited to show that a tenant’s interest cannot be transferred to a stranger through a will.
• Dr. Anant Trimbak Sabnis v. Vasant Pratap Pandi [AIR 1980 Bombay 69]*: Cited to show that the words “assign” and “transfer” in a rent act include a bequest.
• Manchegowda vs. State of Karnataka [(1984) 3 SCC 301]*: Referred to for the restrictions on transfer of granted lands to Scheduled Castes and Tribes.
• Lingappa Pochanna Appelwar vs. State of Maharashtra and another [(1985) 1 SCC 479]*: Referred to for the restoration of land to Scheduled Tribes and the legislative competence of the State.
• Pandey Oraon vs Ram Chander Sahu and Others [(1992) Supp 2 SCC 77]*: Referred to for the broad interpretation of “transfer” to protect Scheduled Tribes.
• Amrendra Pratap Singh vs. Tej Bahadur Prajapati and Others [(2004) 10 SCC 65]*: Referred to for the broad definition of “transfer” to include any dealing that extinguishes a tribal’s right to property.
• State of Rajasthan and Others vs. Aanjaney Organic Herbal Private Limited [(2012) 10 SCC 283]*: Referred to for the interpretation of “person” in the context of land transfers to Scheduled Castes and Tribes.
• Rajasthan Housing Board vs. New Pink City Nirman Sahkari Samiti Limited and Another [(2015) 7 SCC 601]*: Referred to for the principle that transactions violating Section 42 of the Rajasthan Tenancy Act are void ab initio.
• Shamjibhai Keshavjibhai Kansagra (Patel) & Ors. V . Principal Secretary, Revenue Dept. (Appeals) & Ors. [AIR 2011 Gujarat 55]*: Referred to for the extension of restrictions on land transfers to testamentary dispositions for tribal lands.
• Samatha vs. State of A.P . and Others [(1997) 8 SCC 191]*: Referred to for the importance of land to the livelihood and dignity of Scheduled Tribes.
• Welfare Association, A.R.P ., Maharashtra and Another vs. Ranjit P . Gohil and Others [(2003) 9 SCC 358]*: Referred to for the principles for interpreting the legislative competence of a statute.
• State of Maharashtra vs. Bharat Shanti Lal Shah and Others [(2008) 13 SCC 5]*: Referred to for the emphasized liberal interpretation of legislative entries.
• Girnar Traders (3) vs State of Maharashtra and Others [(2011) 3 SCC 1]*: Referred to for the doctrine of pith and substance and legislative competence of the State Legislature.

The Supreme Court reasoned that allowing testamentary disposition of agricultural land to non-agriculturists would defeat the objective of the Bombay Tenancy Act. The court stated that the term “assignment” in Section 43 must be interpreted to include testamentary disposition to maintain the Act’s intent. The court emphasized that the Act is designed to protect the interests of cultivators and prevent the concentration of land in the hands of non-agriculturists.

The court also noted that the legislative intent is to ensure that land is cultivated personally by the owner, and allowing testamentary transfers to non-agriculturists would undermine this goal. The court held that a will cannot be used to bypass the statutory restrictions on land transfers.

What weighed in the mind of the Court?

The Supreme Court’s reasoning was heavily influenced by the need to uphold the legislative intent of the Bombay Tenancy Act, which is to protect agricultural land and ensure it remains with actual cultivators. The court prioritized the social justice aspect of the Act, which aims to prevent exploitation and ensure equitable distribution of land. The court also emphasized the need to prevent circumvention of the Act through testamentary dispositions.

Ratio of Fact to Law Influence

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision. The court held that agricultural land cannot be transferred to a non-agriculturist through a will under the Bombay Tenancy and Agricultural Lands Act, 1948. The court interpreted the term “assignment” in Section 43 to include testamentary disposition, thus restricting such transfers. The court also emphasized that the Act’s purpose is to protect agricultural land and ensure it remains with agriculturists.

Implications of the Judgment:

• This judgment clarifies that restrictions on land transfers under the Bombay Tenancy Act also apply to testamentary dispositions.
• It prevents non-agriculturists from acquiring agricultural land through wills, thereby preserving the legislative intent of the Act.
• The ruling ensures that agricultural land remains with actual cultivators and is used for agricultural purposes.
• It sets a precedent for similar cases involving land transfer restrictions in other states.

Flowchart