JUDGMENT <NAME>, J.

1. This is an appeal by certificate granted by <ORG>. The facts of this case are almost indentical to those in the case of General Manager, <ORG> and Anr. etc, v. A.V.R. <NAME> and <ORG> etc. respondents in this case relevant time, as in the other case, were the employees of <ORG> in this case the <ORG> After the closing of <ORG>, all the respondents allotted to <ORG> with the formation of that zone. belonged to either one or the other of the three categories of the different sources from which the staff for the temporary grain shop complex was drawn. In the case of <CITATION> (supra) the employees had prayed under Article 226 of the Constitution in <ORG> for the issue of a writ of mandamus directing the <ORG> authorities to fix the inter as seniority of the writ petitioners as per original proceedings dated October 16, 1952 of the <ORG> Board and not to give effect to the subsequent proceedings dated November 2, 1957 and January 13, 1961 of the Board issued by way of modifications and clarifications of its earlier proceedings of 1952. A learned single Judge of <ORG> in <NAME>'s case had allowed the writ petition. The Letters Patent Appeal was dismissed by a Division Bench. The decision of <ORG> was affirmed by this Court with slight modification and it was held "`that the discrimination envisaged in the impugned directions dated November 2, 1957 and January 13, 1961, excepting in so far as they pertain to personnel of category (1) is arbitrary and violative of Articles 14 and 16 of the Constitution,"

2. In the present case also the learned single judge allowed the writ application and following the Bench decision of <ORG> in <NAME>'s case the writ appeal was dismissed in this case also.

3. We do not consider it necessary to narrate the facts of this case except in regard to a few respondents, as by and large, the facts are also identical to those in <NAME>'s case. The judgment of <ORG> is affirmed except to the extent indicated in the judgment of this Court in <NAME>'s case and subject to the clarification made below.

4. With respect to the case of <NAME> respondent No. 10 who was petitioner No. 10 in the writ petition, it was pointed out before the learned single judge on behalf of the appellant that he was originally appointed as a peon in regular department on 26 6-1942 and was confirmed as such. He was then transferred to <ORG> on 13-10-1944 on promotion as a clerk. It was also pointed out that after reverting from <ORG> the tenth respondent was working in his substantive post of a peon.

5. As respects the cases of respondents 4, 5 and 33 who were respectively petitioners 4, 5 and 34 in the writ petition the appellants case was that they had been drafted into other cadres. They were originally given their seniority in the cadre of <ORG> as it was given to the other <ORG> Shop Clerks. But later they volunterred for promotion as Assistant Station Masters in the years 1955 and 1956 earlier to the receipt of the revised instructions of <ORG> in the years 1957 and 1961. They were confirmed as Assistant Station Masters and thereupon they ceased to have any lien in the cadre of <ORG>. As regards respondent No. 27 who was petitioner No. 28 in the writ petition, certain other facts were pleaded showing that he had also gone to a differrent cadre. The learned single judge did not make any clarification or distinction in the application of the instructions issued in the year 1952 in cases of respondents 10, 4, 5, 27 and 33. Argument put forward by learned Counsel for the appellant is that determination of seniority on the basis of the decision of this <ORG> in <NAME>'s case would be only applicable in the cadre of clerks and not in any other cadre lower and higher. The grievance is justified to some extent. Primarily the instructions issued in the year 1952 which were held to govern the cases of the employees like the respondents were for determination of seniority in the cadre of clerks. It was not meant to override any other instruction, rule or directions concerning the determination of seniority in any other cadre. For instance if a person had become a confirmed Assistant Station Master earlier than any of the respondents 4, 5 and 34, the latter could not count his entire period of working in the clerk's post for getting seniority over the; former. If, however, the seniority determined on the basis of the decision of this <ORG> in <NAME>'s case was to be reflected in determination of the seniority in any other cadre to which any of the respondents might have gone, then the seniority in the cadre of the clerk will have to be determined on the principles laid down in <NAME>'s case.

6. We accordingly dismiss this appeal but subject to the clarifications made above. There will be no order as to costs.


JUDGMENT <NAME>, J.

1. This appeal arises out of a suit for redemption instituted by respondent 1 on 15th July 1927 to redeem a usufructuary mortgage in favour of the appellant, executed by respondent 2, <NAME>, on 14th June 1923.

2. As originally framed, the suit was a suit for redemption based on the simple ground that mortgage money had become payable and there should be a redemption. In the lower appellate Court another ground was taken, namely that there had been a breach of contract by the appellant, and therefore redemption should be allowed, although the term had not expired. The learned Subordinate Judge decreed the suit on both the grounds though the learned <NAME> had decreed the suit on the first ground alone.

3. The facts are briefly these : <NAME>, the mortgagor, made two simple mortgages, one in favour of one <NAME> for a sura of Rs. 240, and the other in favour of <NAME> for a sum of Rs. 410 on 8th January 1921. The first mortgage money was payable without interest by instalments of Rs. 20 a year, the instalments being payable on 1st July 1921 and in subsequent years. The money due to <NAME> was payable by instalments of Rs. 30 each on 1st July of every year commencing with 1921. <NAME> executed a third simple mortgage in favour of one <NAME> on 16th September 1922 for a sum of Rs. 200.

4. To arrange payment of all these three mortgages <NAME> executed the mortgage in question, namely the one in favour of <NAME>, on 14th June 1923 for a sum of Rs. 1,225. Prior to the execution of this document <NAME> had paid off the instalments which fell duo in 1921 and 1922, to the two mortgagees <NAME> and <NAME>. It was agreed between the mortgagor and <NAME> that <NAME> would pay the instalments, as they fell due to <NAME> and <NAME>, and <NAME> would pay Rs. 275 to <NAME> and would pay Rs. 450 in cash to <NAME>. <NAME> and <NAME> were paid up, and the instalments due to <NAME> and <NAME> were paid up to 1st July 1925.

5. There was a default in payment of the? instalments due to <NAME> on 1st, July 1926, and he brought a suit for recovery of the entire money due to him on 1st July 1926 and obtained a decree on 9th March 1927. Thereupon, <NAME> executed a usufructuary mortgage in? favour of the plaintiff <NAME> on 21st April 1927 for Rs. 1,600 and left, portions of the mortgage money with <NAME> for payment to his previous creditors, namely <NAME>, <NAME> and <NAME>, the appellant. He took a sum of Rs. 182 in cash.

6. <NAME> thereupon instituted the-suit out of which this appeal has arisen for redemption of the mortgage of 14th June 1923.

7. The plaintiff was met with the plea, that the mortgage was for ten years certain and as the term had not expired, there could be no redemption. In the appellate Court it was urged on behalf of <NAME> that the nonpayment of the instalment of 1926 by <NAME>, amounted to a breach of contract and that, this fact entitled <NAME> to sue for redemption before the expiry of the terms. The first question that we have to consider is, whether on the terms of the usufructuary mortgage of 1923, it is open to-<NAME> to ask for redemption before the expiry of ten years. <CITATION> A.I.R. 1914 P.C. 36 their Lordships of <ORG> laid down, the doctrine that the term of a mortgage is for both the mortgagor and the mortigagee. Within the term the mortgagee cannot enforce the mortgage and within: the term the mortgagor cannot sue for redemption. It was no doubt open to the parties to fix two different dates for the enforcement of the rights of the mortgagor and the mortgagee respectively. But where only one term is fixed it is to be regarded that that term is meant equally for both.

8. With this rule of law in our mind if we read the document in question we shall see without difficulty that there was only one term, and that was for both, the parties. The translation that had been supplied to us reads as follows:

Whereas I have taken a loan of Rs. 1,225...and have made a usufructuary mortgage for a term of ten years The agreement is that when I, the mortgagor, do pay to the mortgagee within ten years the entire mortgage money, cash and in a lump sum, then the property mortgaged will stand redeemed.

9. Again we have got the following sentence:

Hence I have executed this usufructuary mortgage deed by conditional sale of ten years that it may serve as evidence when necessary.

10. There are two other terms which are material. One is that after the expiry of ten years, the mortgagee of the property would become the vendee (proprietor) and the mortgagor would become the vendor. The other term is that sums of money were left with the mortgagee so that he might pay annually the instalments due to <NAME> and <NAME>.

11. To take up the last clause first : it appears to us that if the idea was that redemption could be had at any time within ten years, it would become impossible for <NAME> to satisfy the money due to <NAME> and <NAME>. We have already mentioned that the amount due to <NAME> was Rs. 240, out of which only Rs. 40 had been paid. It was therefore clearly contemplated that <NAME> would remain in possession for ten years so that he may be able to pay up the balance of Rs. 200 in the course of ten years at the rate of Rs. 20 a year.

12. At two places already quoted we have got the expressions that the term of the mortgage was ten years, but as against these two clauses, there is the clause which says that the mortgagor would be entitled to redeem the property if he paid within ten years. The question is whether the last clause overrides the two other clauses, and if not, what is the meaning of the expression 'within ten years?" In our opinion the term of the mortgage being distinctly mentioned at two places, it is not open to us to read the words 'within ton years" as moaning at any time before the expiry of ten years." The idea of putting in the words "within ten years" arose from this : on the expiry of ten years the mortgage was to cease as a mortgage transaction and was to become a sale transaction. That is why it was said that the payment had to be paid within ten years.

13. It has been argued that the mortgagor must be allowed to redeem, within the term of ten years as under the actual terms of the mortgage, he will otherwise, have no opportunity to pay. If the mortgagor cannot pay within ten years, he cannot pay after the expiry of 10 years, for then, the mortgagee becomes the owner and therefore there can be no redemption after ten years. The argument is not sound. A mortgagee by conditional sale is not entitled to become the owner of the property, without a suit for foreclosure, and it is always open to a mortgagor to pay up and avoid foreclosure at any time before there is a final decree for foreclosure. Therefore whenever there is a mortgage by conditional sale, and there is a term fixed for the mortgage, the condition stipulated is bound to be in the language of the present document that the mortgagor would be entitled to redeem the property within a specified number of years. There is to be no redemption within the term of the] mortgage and there is to be no foreclosure within the term of the mortgage. If after the expiry of the term of the mortgage, a payment is made there will be a redemption. If there is no payment the mortgagee would be entitled to sue for foreclosure. It is not necessary that a period should be fixed, after the expiry of the term of the mortgage, within which the mortgagor is to be permitted to pay up. By way of illustration, we may say that it was not necessary in this particular case before us, to say that after the period of ten years, the mortgagor should have had, say, a period of one year, within which he could pay up.

14. A number of cases has been cited before us on either side in order to guide us as to how we are to interpret the document before us. It is always a profitless task to attempt to read one document in the light of another, and we will simply content ourselves with quoting the cases. Learned Counsel in this case have placed before us these cases. For the appellant, <NAME> am <CITATION> A.I.R. 1928 All. 131. For the respondents: <NAME> v. <NAME>  39 I.C. 643.

15. We hold that no redemption is possible within the period of ten years under the terms of the mortgage.

16. As regards the point that there has been a breach of contract on the part of the appellant, and therefore there should be a redemption in spite of the non-expiry of the term of the mortgage : this was purely a question of fact and no pleadings were there in the Court of first instance on the point and there was no issue. The learned Subordinate Judge hearing the appeal ought not to have decided the case on the question of fact without giving the parties an opportunity to meet it.

16. The facts involved have already been cited above. One point is clear, namely, <NAME> never had an opportunity to pay off' the decree passed in favour of <NAME>, It has been conceded before us that <NAME> contested <NAME>'s right to bring his suit owing to the default, but in spite of his contest <NAME> lost and a decree was made against him, as also against <NAME> on 3rd March 1927. If the decree had been executed <NAME>, in all probability, would have paid up. If he had failed to pay it might have been said that he committed a breach of the contract. On the other hand, if <NAME> had paid up there could have been no ground for complaint. But what happened was that within a month and a half of the passing of the decree in favour of <NAME> the present respondent 1 Shah Ahsanul Ilaq obtained a mortgage, on 21st April 1927 and wanted to effect a redemption. We are not aware that <NAME> ever denied his liability to satisfy the decree of <NAME>. In the circumstances we do not see how there was a breach of contract.

17. In view of these facts we do not propose to embark on an investigation of the subject, namely, whether on the failure on the part of the mortgagee to pay a part of the mortgage money, as agreed by him, it is open to the mortgagor or <ORG> representative to institute a suit for redemption within the term of the mortgage. The cases that have been quoted before us are extreme cases, but whether they are correctly decided or not it is not necessary for us to consider.

18. In the result we allow the appeal, set aside the decrees of the <ORG> below and dismiss the suit of respondent 1, <NAME>, with costs throughout.


REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3541 OF 2011 (Arising out of SLP (Civil) No. 8162 of 2007) <ORG> .... Appellants Versus <ORG> .... Respondent JUDGMENT

<NAME>, J.

Leave granted.

2. This appeal, by special leave, arises from the order dated December 8, 2006 passed by the Chief Justice of <ORG> in the proceedings under Section 11(6) of the Arbitration and Conciliation Act , 1996 (for short, `1996 Act') whereby he held that all disputes between the parties to the contract have to be referred to the arbitration and appointed Mr. <NAME>, retired Chief Justice of <ORG>, as sole arbitrator to decide the disputes between the parties.

3. The respondent -- <ORG> (for short, `the contractor') -- was awarded a contract (CA No. CEBTZ--14/95-96) on September 17, 1995 by the first appellant-- <ORG> -- for the work, `provisions of OTM accommodation and certain essential technical buildings' to be erected and installed at Bhatinda. The first phase of the work was to be completed by July 20, 1996 and the second phase by January 20, 1997.

4. The agreement between the parties made IAFW--2249 an integral part of the contract. Condition 70 thereof provided mode for resolution of disputes and differences between the parties through arbitration.

5. The work is said to have been completed by the contractor, albeit belatedly, on August 31, 1998. The completion certificate was issued on September 9, 1999.

6. The contractor furnished no-claim certificates on April 3, 2000, April 28, 2000 and May 4, 2000 and the final bill was signed on May 4, 2000.

7. The payment of final bill was released to the contractor on June 19, 2000. Thereafter, the bank guarantee amounting to Rs. 21,00,000/- was also released on July 12, 2000. Immediately after release of the bank guarantee, on that very day, i.e. July 12, 2000, the contractor wrote to the appellants withdrawing `no-claim certificates'; it also lodged certain claims.

8. The Chief Engineer, Bhatinda Zone, Bhatinda (Appellant No. 3 herein) vide his letter dated July 13, 2000 declined to entertain the claims of the contractor on the ground that the final bill has been accepted by the contractor after furnishing the `no-claim certificates' and no claim under the contract remained.

9. The contractor vide its letter dated September 10, 2000 requested the Engineer-in-Chief, <ORG> Headquarters, Kashmir House, New Delhi (Appellant No. 2 herein) to refer the disputes between the parties for resolution to the arbitrator. The contractor stated in that letter that if the arbitrator was not appointed within 30 days from the date of request, it may be constrained to seek the remedy as may be available under the law.

10. As no arbitrator was appointed by the appellants despite the request made in the letter dated September 10, 2000, the contractor made an application under Section 11 of the 1996 Act before the Civil Judge, (<ORG>), <NAME> on January 10, 2001. The application, after contest, was dismissed by the Civil Judge, <ORG>, <NAME> on January 6, 2003.

11. Being not satisfied with the order dated January 6, 2003, the contractor challenged that order by filing a writ petition before <ORG> and Haryana.

12. <ORG> of <ORG> heard the parties and by its order dated May 20, 2004 dismissed the contractor's writ petition.

13. The contractor challenged <ORG> order by filing a special leave petition before this Court. This Court disposed of the special leave petition on January 3, 2006 by directing that the application filed by the contractor under Section 11 of the 1996 Act shall be placed before the Chief Justice of the Punjab and Haryana <ORG>, for appropriate order thereon. This Court, consequently, set aside the orders of the <ORG> and the lower court.

14. It was then that the Chief Justice of the Punjab and Haryana High Court decided the application filed by the contractor under Section 11(6) of the 1996 Act and passed the order impugned in the present appeal.

15. Mr. <NAME>, learned senior counsel for the appellants made two-fold submission : (i) that no arbitrable dispute existed between the parties as full and final payment has been received by the contractor voluntarily after submission of `no-claim certificates' and the final bill, and (ii) that, in any case, the Chief Justice in exercise of his power under Section 11(6) ought to have given due regard to the arbitration clause and appointed the arbitrator in terms thereof.

16. Ms. <NAME>, learned senior counsel for the contractor, on the other hand, vehemently contended that the whole case of the contractor from the very beginning had been that `no- claim certificates' were given by the contractor under the financial duress and coercion as the appellants had arbitrarily withheld the payment. She would submit that the issue whether `no-claim certificates' were given voluntarily or under financial duress, is an issue which must be decided by the arbitrator alone and it is for this reason that the Chief Justice, in the proceedings under Section 11(6) , has referred the disputes between the parties to the arbitrator. In this regard, she heavily relied upon a recent decision of this Court in the case of <CITATION> . She also referred to two earlier decisions of this Court, namely, <CITATION> , <CITATION> .

17. That IAFW--2249 was made an integral part of the contract between the parties and condition 70 thereof provided for mode of resolution of disputes and differences between the parties through arbitration is not in dispute. Condition 70 (arbitration clause) reads as under :

"70. Arbitration-All disputes, between the parties to the Contract (other than those for which the decision of the C.W.E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be referred to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the works or termination or determination of the contract under Condition Nos. 55, 56 and 57 hereof.

Provided that in the event of abandonment of the works or cancellation of the Contract under Condition Nos. 52,53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalized by the 1 (2009) 1 SCC 267 2 (2004) 2 SCC 663 3 (2006) 13 SCC 475 Government to get the works completed by or through any other Contractor or Contractors or Agency or Agencies. Provided always that commencement or continuance of any arbitration proceeding hereunder or otherwise shall not in any manner militate against the Government's right of recovery from the contractor as provided in Condition 67 hereof.

If the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place.

The arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence.

The Arbitrator may proceed with the arbitration, exparte, if either party, inspite of a notice from the Arbitrator fails to take part in the proceedings.

The Arbitrator may, form time to time with the consent of the parties, enlarge, the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award.

The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters, referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute.

The venue of Arbitrator shall be such place or places as may be fixed by the Arbitrator in his sole discretion. The award of the Arbitrator shall be final and binding on both parties to the contract.

If the value of the claims or counter claims in an arbitration referred exceeds Rs. 1 lakh the arbitrator shall give reasons for the award".

18. The controversy presented before us does not concern the existence of arbitration agreement but it relates to whether after furnishing `no-claim certificates' and the receipt of payment of final bill, as submitted by the contractor, any arbitrable dispute between the parties survived or the contract stood discharged. Before we turn to the factual aspect, it is appropriate to carefully consider the decision of this <ORG> in <ORG> at some length as the learned senior counsel for the contractor placed heavy reliance on it.

19. In <ORG>, this Court surveyed a large number of earlier decisions of this Court, namely, <ORG> v. <NAME> & Bros4., <ORG> v. <CITATION> , <ORG>, Ranipur v. M/s. Amar Nath Bhan Prakash7, <CITATION> .8, <CITATION> & 4 AIR (1959) SC 1362 5 AIR (1968) SC 522 6  7  8  9 1994 Supp (3) SCC 83  <CITATION> .10, <ORG> v. <ORG>, <CITATION> .12, <CITATION> . 13 , <ORG> v. <ORG>, <ORG> v. <ORG> & Anr. 15, <CITATION> . 16 and <CITATION> . With regard to the jurisdiction of the Chief Justice/his designate in the proceedings under Section 11 of the 1996 Act, this Court culled out the legal position in paragraph 51 (page 294) of the report as follows :

"51. The Chief Justice/his designate exercising jurisdiction under Section 11 of the Act will consider whether there was really accord and satisfaction or discharge of contract by performance. If the answer is in the affirmative, he will refuse to refer the dispute to arbitration. On the other hand, if the Chief Justice/his designate comes to the conclusion that the full and final settlement receipt or discharge voucher was the result of any fraud/coercion/ undue influence, he will have to hold that there was no discharge of the contract and consequently, refer the dispute to arbitration. Alternatively, where the Chief Justice/his designate is satisfied prima facie that the discharge voucher was not issued voluntarily and the claimant was 10 1994 Supp (3) SCC 126 11 1995 Supp (3) SCC 324 12  13  14  15  16  17  under some compulsion or coercion, and that the matter deserved detailed consideration, he may instead of deciding the issue himself, refer the matter to <ORG> with a specific direction that the said question should be decided in the first instance."

20. The Bench in <ORG> in paragraphs 42 and 43 (page 291), with reference to the cases cited before it, inter alia, noted that there were two categories of the cited cases; (one) where the <ORG> after considering the facts found that there was a full and final settlement resulting in accord and satisfaction, and there was no substance in the allegations of coercion/undue influence and, consequently, it was held that there could be no reference of any dispute to arbitration and (two) where the court found some substance in the contention of the claimants that `no dues/claim certificates' or `full and final settlement discharge vouchers' were insisted and taken (either in printed format or otherwise) as a condition precedent for release of the admitted dues and thereby giving rise to an arbitrable dispute.

21. In <ORG>, the consequences of discharge of the contract were also considered. In para 25 (page

284), it was explained that when a contract has been fully performed, then there is a discharge of the contract by performance and the contract comes to an end and in regard to such a discharged contract, nothing remains and there cannot be any dispute and, consequently, there cannot be reference to arbitration of any dispute arising from a discharged contract. It was held that the question whether the contract has been discharged by performance or not is a mixed question of fact and law, and if there is a dispute in regard to that question, such question is arbitrable. The <ORG>, however, noted an exception to this proposition. The exception noticed is that where both the parties to a contract confirm in writing that the contract has been fully and finally discharged by performance of all obligations and there are no outstanding claims or disputes, courts will not refer any subsequent claim or dispute to arbitration. Yet another exception noted therein is with regard to those cases where one of the parties to the contract issues a full and final discharge voucher (or no-dues certificate, as the case may be) confirming that he has received the payment in full and final satisfaction of all claims, and he has no outstanding claim. It was observed that issuance of full and final discharge voucher or no-dues certificate of that kind amounts to discharge of the contract by acceptance or performance and the party issuing the discharge voucher/certificate cannot thereafter make any fresh claim or revive any settled claim nor can it seek reference to arbitration in respect of any claim.

22. In paragraph 26 (pages 284-285), this Court in <ORG> held that if a party which has executed the discharge agreement or discharge voucher, alleges that the execution of such document was on account of fraud/coercion/undue influence practised by the other party, and if that party establishes the same, then such discharge voucher or agreement is rendered void and cannot be acted upon and consequently, any dispute raised by such party would be arbitrable.

23. In paragraph 24 (page 284) in <ORG>, this Court held that a claim for arbitration cannot be rejected merely or solely on the ground that a settlement agreement or discharge voucher has been executed by the claimant. The Court stated that such dispute will have to be decided by the Chief Justice/his designate in the proceedings under Section 11 of the 1996 Act or by <ORG>.

24. In our opinion, there is no rule of the absolute kind. In a case where the claimant contends that a discharge voucher or no-claim certificate has been obtained by fraud, coercion, duress or undue influence and the other side contests the correctness thereof, the Chief Justice/his designate must look into this aspect to find out at least, prima facie, whether or not the dispute is bona fide and genuine. Where the dispute raised by the claimant with regard to validity of the discharge voucher or no-claim certificate or settlement agreement, prima facie, appears to be lacking in credibility, there may not be necessity to refer the dispute for arbitration at all. It cannot be overlooked that the cost of arbitration is quite huge - most of the time, it runs in six and seven figures. It may not be proper to burden a party, who contends that the dispute is not arbitrable on account of discharge of contract, with huge cost of arbitration merely because plea of fraud, coercion, duress or undue influence has been taken by the claimant. A bald plea of fraud, coercion, duress or undue influence is not enough and the party who sets up such plea must prima facie establish the same by placing material before the Chief Justice/his designate. If the Chief Justice/his designate finds some merit in the allegation of fraud, coercion, duress or undue influence, he may decide the same or leave it to be decided by <ORG>. On the other hand, if such plea is found to be an after-thought, make-believe or lacking in credibility, the matter must be set at rest then and there.

25. In light of the above legal position, we now turn to the facts of the present case.

26. At the time of receiving payment on account of final bill, the contractor executed the certificate in the following terms :

"a) I/we hereby certify that I/we have performed the work under the condition of the contract agreement No. CEBTZ-14/95-96, for which payment is claimed and that I/we have no further claims under CA No. CEBTZ-14/95-96.

b) Received rupees two lakhs fifteen thousand one hundred seventy eight only. This payment is in full and final settlement of all money dues under CA No. CEBTZ-14/95-96 and I have no further claims in respect of the CA No. CEBTZ-14/95-96."

(emphasis supplied by us)

27. The contractor also appended the following certificate:

"It is certified that I have prepared this final bill for claiming entire payment due to me from this contract agreement. The final bill includes all claims raised by me from time to time irrespective of the fact whether they are admitted/accepted by the department or not. I now categorically certify that I have no more claim in respect of this contract beyond those already included in this final bill by me and the amount so claimed by me shall be in full and final satisfaction of all my claims under this contract agreement. I shall however, receive my right to raise claim to the extent disallowed to me from this final bill."

28. The above certificates leave no manner of doubt that upon receipt of the payment, there has been full and final settlement of the contractor's claim under the contract. That the payment of final bill was made to the contractor on June 19, 2000 is not in dispute. After receipt of the payment on June 19, 2000, no grievance was raised or lodged by the contractor immediately. The concerned authority, thereafter, released the bank guarantee in the sum of Rs. 21,00,000/- on July 12, 2000. It was then that on that day itself, the contractor lodged further claims.

29. The present, in our opinion, appears to be a case falling in the category of exception noted in the case of <ORG> (<ORG> 25, page 284). As to financial duress or coercion, nothing of this kind is established prima facie. Mere allegation that no-claim certificates have been obtained under financial duress and coercion, without there being anything more to suggest that, does not lead to an arbitrable dispute.

30. The conduct of the contractor clearly shows that `no claim certificates' were given by it voluntarily; the contractor accepted the amount voluntarily and the contract was discharged voluntarily.

31. We are, thus, unable to sustain the order of the Chief Justice in the proceedings under Section 11(6) of the 1996 Act. In view of our finding above, it is not necessary to consider the alternative submission made by the senior counsel for the appellants that the Chief Justice in exercise of his power under Section 11(6) ought to have appointed the arbitrator in terms of the arbitration clause and the appointment of Mr. <NAME>, retired Chief Justice of <ORG>, was not in accord with the arbitration agreement.

32. The appeal is, accordingly, allowed. The impugned order dated December 8, 2006 passed by the Chief Justice of <ORG> is set aside. The parties shall bear their own costs.

.........................J.

(<NAME>) ........................ J.

(<NAME>) NEW DELHI.

APRIL 25, 2011.


PETITIONER: <ORG>. Vs. RESPONDENT: THE STATE OF KERALA AND ANOTHER DATE OF JUDGMENT27/04/1972 BENCH: SIKRI, <NAME> BENCH: SIKRI, <NAME> SHELAT, J.M. RAY, A.N. DUA, I.D. KHANNA, HANS RAJ CITATION: 1972 AIR 2301 1973 SCR (1) 356 1972 SCC (2) 218 CITATOR INFO : R 1973 SC2734 (19,33,36) F 1974 SC1373 (16) F 1974 SC1522 (3) R 1975 SC1193 (25) RF 1977 SC1825 (58) R 1980 SC 286 (38,39) RF 1980 SC1762 (5) R 1980 SC1955 (20) ACT: Kannan Devan Hills (Resumption of Lands) Act, 1971 (Kerala Act 5 of 1971)-Competency of <ORG> legislature to enact- Sections 4 & 5 of Act do not fall under entry 52 List I but under entries 18 of List II and 52 of List III in Seventh Schedule of Constitution-Act whether has protection of Act 31A of Constitution-Land in question whether 'estate'. HEADNOTE: The petitioner was in possession of an area of approximately 1,27,904 acres, commonly known as the 'Concession Area' lying contiguously in the Kannan Devan Hills village. The concession was first given to the predecessor-in-interest of the appellant company in 1877 by the poonjar Chief for a consideration of Rs. 5,000/. After some years a yearly sum of Rs. 3,000 was to be paid to the rent collector of the Chief. In 1878 the Maharaja of Travancore ratified the Concession on certain conditions. In 1886 the agreement called the Second Pooniat Concession was entered into modifying the previous deed of ratification. A Royal Proclamation was made on September 24, 1899 whereby the Poonjar Chief surrendered the propriety rights which he had exercised over the tract known as Anjanad and Kannan Devan Hills. According to the petitioner it had all times been holding, cultivating, enjoying and dealing with the Conces- sion land as the absolute owner thereof. The petitioner further alleged that it had established 23 tea estates, with factories in each estate for the manufacture of tea, hospitals, quarters, township and shopping centres. The Kannan Devan Hills (Resumption of Lands) Act 1971 (Kerala Act 5 of 1971) the lands agricultural & non-agricultural situated in the Kannan Devan, Hills Village vested in <ORG>.. The petitioner company filed a writ petition under Art. 32 of the Constitution challenging certain provisions of the Act. The questions that fell for consideration were : (i) whether the impugned Act was within the legislative competence of the <ORG> of Kerala; (ii) whether the impugned Act was protected from challenge under Art 31A of the Constitution. HELD : (i) The <ORG> has legislative competence to legislate on entry 18 List It and entry 42 List III. This power cannot be denied on the ground that it has some effect on an industry controlled under entry 52 List 1. Effect is not the same thing as subject-matter. If a <ORG> Act , otherwise valid, has effect on a matter in List I it does not cease to be legislation with respect to an entry in List II or List Ill. The object of ss. 4 and 5 seems to be enable the <ORG> to acquire all the lands which do not fall within the categories (a), (b) and (e) of s. 4(i) . These provisions are really incidental to the exercise of the power of acquisition. The <ORG> cannot be denied a power to ascertain what land should be acquired by it in the public interest. [369 C-D] The fact that the plantation was run as an integrated unit cannot impinge upon and take away the legislative power of the <ORG> in respect of List II entry 18. 370 [F-G] Chika Ramji v. <ORG> of Uttar Pradesh,  S.C.R. 393, 420 and <ORG> v. Attorney General,  A.C. 122, 123, 140, applied. 357 <CITATION> ,  2 S.C.R. 100, <CITATION> ,  1 S.C.R. 712 and <CITATION> ,  3 S.C.R. 712, referred to, There was no repugnance between the provisions of the impugned Act and the Tea Act . It was said that there is conflict because it is <ORG> and not <ORG>, which should determine what land is necessary for the efficient working of the plantation-, but <ORG> has not chosen even if it could, to say so. [373G- <CITATION> ,  3 S.C.R. 88, applied. (ii)On the material placed before the <ORG> it was difficult to resist the conclusion that the lands in dispute fell within the expression 'Janmam right'. It is stated in Travancore Land Revenue Manual Volume IV there are no lands that do not belong to a Janmam and the <ORG> becomes a Janmi by escheat, confiscation or otherwise. The effect of the Royal Proclamation of 1899 must be that the <ORG> became the Janmi. [376F] <CITATION> ,  3 S.C.R. 887 and Sakanuram Sabbayogam v. <ORG> of Karala, A.I.R. 1963 Kerala 101, referred to, (iii)From the Travancore Land Revenue Manual it would appear that the <ORG> grants like Kanan Devan Hills Concession and Ten square Miles Concession and Munro Lands, were treated under the heading 'Pandaravaka Lands', i.e., land belonging to the <ORG>. It was held by this <ORG> in <NAME> case that Pandaravaka Verumpattam lands could be regarded as local equivalent of an estate under cl. (2) of Art. 31A. If it is held that the land in question does not fall within the expression 'janmam right, it may possibly be covered by the decision of this <ORG> in <NAME> case but as no arguments were addressed on this point it was not necessary for the <ORG> to express its final opinion. [379C-D] Purushothaman Nambudri V.. Sate of Kerala,  Supp. 1 S.C.R. 753, referred to. (iii)The three purposes mentioned in s. 9 namely (1) reservation of land for promotion of agriculture; (2) reservation of land for the welfare of agricultural population and (3) assignment of remaining lands to agri- culturists and agricultural labourers, were covered by the expression " agrarian reform" and the legislation was protected from challenge under Art. 31-A. [382]  <CITATION> ,  1 S.C.R. 561, <CITATION> ,  1 S.C.R. 614 and <CITATION> ,  1 S.C.R. 82. The wide wording of the first two purposes did not carry them beyond the concept of 'agrarian reform'. The definition of 'common purpose' which was sustained by this <ORG> in <NAME> case shows that the purposes sustained thereby would come under either the express "pro- motion of agriculture" or "welfare of agricultural population" in s. 9 Indeed some would fall under both. For instance, reservation of lands for manure pits water-works or wells, village water courses or water 358 channels and grazing grounds would promote agriculture; schools and playgrounds, dispensaries, public latrines etc. would be for the welfare of he agriculturists. [381C] If the <ORG> were to use lands for purposes which have no direct connection with the promotion of agriculture or welfare of agricultural population the <ORG> could be restrained from using the lands for these purposes. Any fanciful connection with these purposes would not be enough. [381D] If the two purposes were understood to mean that these include only common purposes', which were sustained by this <ORG> and purposes similar thereto it would be difficult to say that they are not for agrarian reform. In a sense agrarian reform is wider than land reform. It includes besides land reform something more and something more is illustrated by the definition of "common purpose" which was sustained by this <ORG> in <NAME> case. [381E-F] The third object-settlement of agriculturists and agricultural labour is clearly covered by the expression "agrarian reform". The main object of agrarian reforms has been to acquire excess land and settle landless labourers and agriculturists.- [382B-C] <NAME> v. <ORG> of Punjab,  1 S.C.R. 82 and <CITATION> ,  1 S.C.R. 362, applied. <CITATION>  1 S.C.R. 561 and <CITATION> ,  1 S.C.R. 82, referred to. JUDGMENT:

ORIGINAL JURISDICTION : Writ Petition No. 44 of 1971. Under Article 32 of the Constitution of India for enforcement of the Fundamental Rights. <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, for the petitioner.

<NAME>, Advocate-General for the State of Kerala, <NAME>, <NAME> and <NAME>

<NAME>, for the respondent.

<NAME>, for the interveners. The Judgment of the Court was delivered by <NAME>, <NAME> Two main points arise in this petition under art. 32 of the Constitution, brought by <ORG>, hereinafter referred to as the petitioners (1) Whether the Kannan Devan Hills (Resumption of Lands) Act, 1971 (Kerala Act 5 of 1971)-hereinafter referred to as the impugned Act-is within the legislative competence of the State of Kerala; and (2) whether the impugned Act is protected from challenge under art. 31A of the Constitution, and if so, to what extent. The petitioner is in possession of an area of approximately 1,27,904 acres, commonly known as the '<ORG> Area' lying contiguously in the Kannan Devan Hills village. The petitioner grows and manufactures tea in the plantation set up and developed by it. The petitioner's predecessor-in-title was one Mr. <NAME>, who obtained, what is called, the first <ORG> from <NAME>, on July 11, 1877 (Mithunam 20, 1052). This <ORG> recited that an, application was made for the grant of the above property to the <NAME> for coffee cultivation. The <ORG> conveyed the properties in consideration of Rs. 5,000/-. It was further stipulated in the <ORG> that "you shall clear and remove the jungles, and reclaim the waste lands within the said boundaries, and cultivate them with coffee up to the year 1058 and from the year 1059, pay our rent collector a yearly rent at the rate of 3,000 British Rupees." Various other conditions were mentioned but it is not necessary to refer to them because this <ORG> was superseded by another agreement called the Second Pooniat Consession.

Before we refer to the terms of the Second Pooniat Conces- sion, we may mention that <NAME> executed a deed of ratification, dated November 28, 1878, by which the Government ratified the First Pooniat Concession dated July 11, 1877. This deed of ratification laid down the terms and conditions in regard to Government assessment and other matters under which the Government permitted the grantee to hold the land. These terms and conditions were declared in the Deed to be independent of any rents or payments due to the Poonjar Chief under the Grantee's Agreement with him. Clause 5 of the Deed of Ratification, is important. It pro- vides, inter alia, that "the grantee can appropriate to his own use within the limits of the grant all timber except the following and such as may hereafter be reserved namely, Teak, Cole Teak, Blackwood, Bhony, Karoontbaly, Sandalwood; should he carry any timber without the limits of the grant it will be subject to the payment of <ORG>, or Customs Duty..........

The eleventh clause reads :

"The land granted shall be held in perpetuity as heritable or transferable property, but every case of transfer of the grant by the grantee shall be immediately made known to the Sircar, who shall have the right of apportioning the tax, if a portion of the holding is transferred."

The twelfth clause stipulates "The discovery of useful mines and treasures within the limits of the grant shall be communicated to the <ORG>, and the grantee shall in respect to such mines and treasures, abide by the decision of the <ORG>."

The sixteenth clause provides :

"The grantee shall be bound to preserve the forest trees growing on the banks of the principal streams running through the tract to the extent of fifty yards in breadth on each side of the stream, the Underwood only being permitted to be cleared and coffee planted instead. Similarly he shall also be bound to preserve the, trees about the crest of the hill to the extent of a quarter of a mile on each side."

On August 2, 1886, the agreement called the Second Pooniat Concession was entered into modifying the previous deed of ratification. It appears that by this time a company called <ORG> had acquired the rights in the said land from <NAME>. The Land Revenue Manual (Vol. 3, Part 1 Revised Edition 1936, p 7) summarises the main provisions.

For our purposes we may only mention the following provisions of the deed :

(1) Assesment of one-half of a British Rupee per annum on every acre of land, other than grass land, which is opened up for the purpose of cultivation or otherwise.

(2) Assessment of two annas and eight pies per annum on every acre, of grass land brought under cultivation or taken up for homesteads and farmsteads, or reserved as shooting reserves or for the grazing of cattle or for any other purposes.

(6) The <ORG> may use and appropriate to its own use within the limits of the <ORG> all timber except teak, cole-teak, blackwood, ebony (Karunthaly) and sandalwood, but should not fell any timber beyond what is necessary for clearing the ground for cultivation or for building, furniture and machinery, within the limits of the grant. No unvalued timber or articles manufactured therefrom should be carried outside, the limits of the grant except in conformity with the rules of <ORG> for the time being in force. ( 10)The land is to be held in perpetuity as heritable or transferable property but every case of transfer of the grant by the <ORG> should be immediately made known by the <ORG> to the Government.

(11) On the discovery by the <ORG> of any useful or valuable mines, minerals or treasures within the limits of the grant, the same should at once be communicated to the Government and the <ORG> should, in respect to such mines, minerals and treasures, abide by the decision of the Government.

A Royal Proclamation was made on September 24, 1899 (Kanni 9, 1075). It recites :

"Whereas we deem it expedient to clearly declare the position of this State in respect of the tract known as Anjanad and Kannan Devan Hills, we are pleased to declare as follows : (1) The tract known as Anjanad and Kannan Devan Hills is an integral portion of our territory and all rights over it belong to and vest in us.

(2) The inhabitants of the said tract and all others whom it may concern are hereby informed and warned that they are not to pay any taxes, rents or dues, or make any other payment to the Poonjar Chief or his representatives or to any person other than an officer of our Government authorised in this behalf, in respect of anything in, upon or connected with the said tract, with the exception, however, of a payment of rupee three thousand per annum from the successors in interests of the late Mr. <NAME> of London and <ORG> now being paid to the said Chief in virtue of a Lease deed executed by the said Chief in favour of the said late Mr. <NAME> on the 11th July, 1877, and which we are pleased to permit the said Chief to continue to receive.

(3) The lands within the said tract will be dealt with by our Government in the same manner as lands in other parts of our territory with such modifications as the circumstances and conditions of the said tract may require and all taxes, rents and dues hitherto paid, and that may hereafter be imposed by our Government shall, with the exception of the sum of rupees three thousand aforesaid, be paid by the, occupants of lands within the said tract whose occupation has been or may be recognized or confirmed by our Government, and of such portions of the said tract as may from time to time hereafter, with the per-

mission of our Government, be occupied, to the officers of our Government who may be authorised in this behalf."

According to the Land Revenue Manual (Vol. III Pt. 1 page

9) "this Proclamation was the outcome of an arrangement made by-the <ORG>, with the Poonjar Chief for the surrender of certain proprietary rights which he had been exercising over the tract known as Anjanad and Kannan Devan Hills." We have set out these facts in detail because it will be necessary to appreciate the significance of the documents in order to decide the question whether these lands fall within expression 'Janmam right' in art. 31A of the Constitution. According to the petitioner it has at all times been holding, cultivating, enjoying and dealing with the Concession Land as the absolute, owner thereof. The petitioner further alleges that it has established 23 tea estates, with factories on each estate for the manufacture of tea, hospitals, quarters and township, and shopping centres and is employing approximately 18,500 persons for the running of the said estates. The breakup of the area of 1,27,904 acres was given as follows Tea Estates

1. Tea Planted area 23,570,95 acres

2. Fuel area 17,851 .55

3. Building sites, roads, Workers gardens, Manner Township 2,605.35

4. Grazing land 1,453.75

5. Swamps and Streams 2,407.36

6. uncultivable lands, rocks, slips, barren lands, ridges etc-. 6,789.51 31,107 -52 31,107 .52 acres

7. Lands interspersed within the boundaries of the tea plantation considered necessary for the protection and efficient management of the tea plantation 23,404 .00 acres Total: 78,082.47

8. Forest Area 22,311.00

9. Set apart for Wild Life Preservation 21,353.60

10. Other grass lands 6,157.49 1,27,904.56 We may now notice the provisions of the impugned Act. The preamble reads as follows :

"Whereas the lands comprising the entire revenue village of Kannan Devan Hills in the Devicolam taluk of 3 63 the Kottayam district had been given on lease by the then Poonjar Chief to late Mr. <NAME> of London and Peermade on the 11th day of July, 1877, for coffee cultivation;

And Whereas the right, title and interest of the lessor had been assumed by the former <ORG>;

And Whereas by such assumption the lands have become the property of the former <ORG>;

And Whereas <ORG> have be- come the successor to the former <ORG>;

And Whereas large extent of agricultural, lands in that village has not been converted into plantations or utilised for purposes of plantation and such lands are not required for the purposes of the existing plantation: I And Whereas the Government consider that such agricultural lands should be resumed for the distribution thereof for cultivation and purposes ancillary thereto."

It would be noticed that in the preamble the State claims that the right, title and interest of the Poonjar Chief had been assumed by the former <ORG> and the lands had become the property of the former <ORG> and now <ORG>. It will also be noticed that the object is to resume agricultural lands for their distribution for cultivation and purposes ancillary thereto.

"Plantation" is defined in s. 2 (f ) of the impugned Act " "Plantation" means any land used by a person principally for the cultivation of tea, coffee, cocoa, rubber, cardamom or cinnamon (hereinafter referred to as "Plantation crops" ".

Section 3 may be set out in full "3. Vesting of Possession of certain lands : (1) Notwithstanding anything contained in any other law for the time being in force, or in any contract or other document, but subject to the provisions of sub-sections (2) and (3), with effect on and from the appointed day, the possession of all lands situate in the Kaanan Devan Hills village in the Devicolam taluk of the Kottayam district shall stand transferred to and vest in the <ORG> free from all encumbrances, and the right, title and

-L128SupCI/72 interest of the lessees add all other persons, including rights of mortgagees and holders of encumbrances) in respect of such lands, shall stand extinguished. (2) Nothing contained in sub-section (1) shall apply in respect of-

(a) plantations, other than plantations belonging to trespassers;

(b) buildings, other than buildings belonging to tres- passers, and lands appurtenant to, and necessary for the convenient enjoyment or use of, such buildings;

(c) play-grounds and burial and burning grounds; and

(d) lands in the possession of <ORG> of any State Government or <ORG>. (3) Nothing contained in tub-section (1) shall apply in respect of so much extent of land held by a lessee under his personal cultivation as is within the ceiling limit applicable to him under any law for the time being in force or any building or structure standing thereon or appurtenant thereto."

It will be noticed that what the section vests in the <ORG> is not only agricultural lands but all lands situated in the kannan Devan Hills village in the Devicolam taluk of the Kottayam district. It extinguishes the rights of the lessees and other persons and vests the lands in the <ORG> subject to some exceptions which are contained in sub- ss. (2) and (3) of s. 3 . Sub-section (2) exempts plantations. Sub-section (3) does not have any bearing on the problem before us.

Section 4 is a peculiar provision which has led the counsel for the petitioner to argue vehemently about the legislative competence of the <ORG>. It reads thus :

"4. Restoration of possession of lands in certain cases.-(1) Where the person in possession of a plantation considers that any lands, the possession of which has vested in the <ORG> under sub-section (1) of section 3 ,-

(a) is necessary for any purpose ancillary to the cultivation of plantation crops in such plantation or for the preparation of the same for the market; or

(b) being agricultural land interspersed within the boundaries of the area cultivated with plantation crops, is necessary for the protection and efficient management of such cultivation; or

(c) is necessary for the preservation of an existing plantation, he may, within sixty days from the date of publication of this Act in the <ORG>, apply to <ORG> for the restoration of possession of such land. (2) An application under sub-section (1) shall be in such form as may be prescribed. (3) 'On receipt of an application under sub- section (1), <ORG> shall, after giving the applicant an opportunity of being heard and after such inquiry as it deems necessary by, order determine, the extent of land necessary for the purpose or purposes specified in the application, and such order shall be final. (4) As soon as maybe after determining the extent of land necessary for the purpose or purposes specified in the application under sub-section (1), '<ORG> shall cause such land to 'be demarcated and put the applicant in possession of such land.

(5) Any person Put in possession of any land under sub-section (4) shall be entitled to,possess that land on the same terms and subject to the same conditions on or subject to wh ich he was holding such land immediately before the appointed day."

It will be seen that s. 4 proceeds on the basis that certain lands, which have vested in the <ORG> under s. 3 , may be necessary for the efficient carrying on of the plantation. A procedure is laid down by which <ORG> shall determine, the extent of land necessary for purposes mentioned in s. 4 (a), (b) and (c) to be specified in the application of the landholder, and direct restoration of possession.

Section 5 alleviates the rigour of s. 4 by giving the <ORG> power to remove the hardship, if any, on the management of the plantation on, the vesting of any land under sub-s. (1) of S. 3. Section 8 provides that no compensation shall be payable for the extinguishment under sub-s. (1) of s. 3 of the right, title and interest of the lessees or other persons or of the rights of mortgagees or holders of encumbrances.

Section 9 may be set out in full. It reads thus 3 66 "9. Assignment of lands.-(1) The <ORG>,. shall, after reserving such extent of the land, the possession of which has vested in the <ORG> under subsection (1) of section 3 (other than lands, the possession of which has been restored under section (4), as may be necessary for purposes directed towards the promotion of agriculture or the welfare of the agricultural population to be settled on such lands, assign on registry the remaining lands to agriculturists and agricultural labourers in such manner, on such terms, and subject to such conditions and restrictions, as may be prescribed.

(2) The Government may be notification in the <ORG>, delegate their power of assignment under subsection (1) to the Collector, subject to such restrictions and control as may be specified in the notification."

The position taken by the <ORG> in its reply is as follows : The petitioner is not an absolute owner, but only a lessee under the <ORG>, especially since the Proclamation issued by <NAME>. The lands to which the provisions of the Act apply, fall within the definition of 'estate' under art. 31A(2) of the Constitution. If the petitioner is the absolute owner of the lands subject to levy of basic tax, as contended, the lands held by the peti- tioner are 'estate' because they are held in Janmam rights or at any rate as the local equivalent of 'estate' in its basic concept as understood in the decisions of this <ORG> falling under art. 3 1 A (2) (a) (i) of the Constitution. In the alternative it is alleged that treating the lands as a lease-hold under the <ORG>, these are undoubtedly lands held or let for the purposes of agriculture or purposes ancillary thereto coming within the inclusive definition of 'estate' under art. 3 1 A (2) (a) (iii) of the Constitution. It is denied that the lands were held primarily for development of the petitioner's tea industry. It is alleged that the petitioner had used large tracts of land for diverse agricultural purposes as was clear from the aver- ments in the petition. It is further asserted that the impugned legislation is a law relation to the agrarian reform.

During the course of the hearing, the petitioner's counsel said that he was willing to argue on the basis that the petitioner was a lessee and not a full proprietor. After we had heard the arguments for some time and it became necessary to adjourn the case, the <ORG> obtained permission to amend its reply and raised the point that the lands of the petitioner were gestate' within the purview of art. 3 1 A (2) (a) (i) being janmam right. We may reproduce the relevant paras. "The Raja of Poonjar was admittedly the Janmi of the said lands at the time of letting as per Annexures B & C to the Writ Petition. By the Royal Proclamation of 1899 (Annexure R-1) the Janmam right of the lessor, the Poonjar Chief, got vested in <ORG>." [Para 4(1)]. "After the said vesting the writ petitioner is a lessee under a Janmi the Sircar, the <ORG>." [Para 4(2)]. Para 4(4) refers to pages 314 and 315 of Travancore <ORG> Manual- Vol. III where it is recorded that the lands of Poonjar Chief are Janmam lands. Further reference is made to Travancore Land Revenue Manual, Vol. IV, which we will discuss a little later.

In the sur-rejoinder affidavit the petitioner denies that Poonjar Chief or Raja was the Janmi of the land covered by the impugned legislation. It is further alleged that "even asuming without admitting that the Poonjar Chief was a Janmi, the Janinam rights of the Chief became vested in the <ORG> by the Royal Proclamation of 1899 (Annexure R-1), the lands became part of and merged with the <ORG> land. The <ORG> as the overlord and the Ruler of the State became the sole owner of the land and the petitioner became a permanent and perpetual lessee of <ORG> with heritable and alienable rights. The impugned legislation in no way deals with the Janmam rights, if any, vested in the <ORG>." It is further stated that "in any event, without prejudice to the other contentions, it is submitted that Article 3 1 A (2) (a) (i) speaks only of "Janmam right" and not "Janmam" land as such."

We may first deal with the question of legislative competence. We have set out the relevant provisions of the impugned legislation. It seems to us clear that in pith and substance it is a law dealing with entry 1 8 of List II and entry 42 of List 111. Entry 1 8 reads :

"Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization."

Entry 42 List III reads "Acquisition and requisitioning of property."

This Court has upheld the legislative competence of <ORG> to deal with land reforms under entry 18 of List 11 and entry 42 of List III in various cases.

The learned counsel for the petitioner, however, contends that ss. 4 and 5 of the impugned Act are a law with respect to entry 52 List I. These provisions, according to him, regulate the carrying on of tea industry, within the competence of <ORG>, by controlling the land available for tea plantation. He says that it is impossible to run an efficient plantation except by having sufficient land (1) for purposes ancillary to cultivation and plantation of the crop and (2) for the preparation of the same for the market. He says that it is also necessary. to have land interspersed within the boundaries of the area cultivated with plantation for the preservation of the existing plantation. He urges that if the effect of the legislation is. to control, the working of the tea plantation the legislation must be regarded, as legislation with respect to entry 52 List I. The learned counsel has drawn our attention to various reports to show, that the plantation is a self-contained unit of <ORG>. In para 1. 1 1 of the Report of the Study Group for Plantation (Tea) it is stated :

"1.11. The cultivation and manufacture of tea do not exhaust the activities associated with tea plantations. A typical plantation covers a wide area, having a large resident population in a number of settlements. Management of plantations involves construction and maintenance of roads and buildings, running of hospitals, schools, creches, and canteens, etc. and in a miniature form, transport and,, public health activities. In short, a plantation is a self- contained unit of Organisation." In the report of <ORG> following measures were recommended :

"1. 18. Taking into consideration the difficulties faced by the industry because of Government enactments and in view of our recommendation in regard to the necessity for undertaking extensions of plantings to achieve the plan targets laid down by Government and the need for replacement to increase foreign exchange earnings of the country' the Committee recommends that the following measures should be taken by Government :-

(i) The Central Government should take steps to convene a conference of all representatives of tea producing State Governments to frame a well-considered policy in regard to land required for expanding tea production. Where land is proposed to be resumed by the State Governments concerned, <ORG> should be taken into consultation.

(ii) The principles underlying all resumption of land should be such as to ensure that tea estates should have enough land available for extensions and for other ancillary purpose for their viability and protection. Land within an estate should in no case be taken over as the integrity of estates must at all costs be maintained."

In the, Second five, Year Plan, While considering the question of exemption from ceilings one of the factors taken into account was the "integrated nature of operations, especially where industrial and agricultural work are undertaken as a composite enterprise." It was recommended that "if these considerations are kept in view there would appear to be an advantage in exempting the following categories of farms from the, operations of ceilings which may he proposed:

(1) tea, coffee and rubber plantation It seems to us clear that the <ORG> has legislative competence to legislate on entry 18 List 11 and entry 42 List 111. This power cannot be denied on the ground that it has some effect on an industry controlled under entry 52 List 1. Effect is not the same thing as subject-matter. If a <ORG> Act , otherwise valid, has effect on a matter in List I it does not cease to be a legislation with respect to an entry in List II or List 111. The object of ss. 4 and 5 seems to be, to enable the <ORG> to acquire all the lands which do not fall within the categories (a), (b) and

(c) of s. 4(1) . These provisions are really incidental to the exercise of the power of acquisition. The <ORG> cannot he denied a power to ascertain what land should be acquired by it in the public interest.

The case of <CITATION> (1) relied on has no relevance. It was held in that case that entry 23 List 11 was subject to entry 54 of the Union List and once a declaration was made and the extent laid down, the subject of legislation to the extent laid became an exclusive subject for legislation by <ORG>. The scope of entry 52 of the Union List is slightly different. Once it is declared by <ORG> by law to, be expedient in the public interest to control the industry, <ORG> can legislate on that particular industry and the States would lose their power to legislate on that industry. But this would not prevent the States from legislating on subjects other than that particular industry.

<CITATION> (2) Bhagwati, J., observed :

"Industry in the wide sense of the term would be capable of comprising three different aspects : (1) raw materials which are an integral part of the industrial process, (2) the process of manufacture or production, and (3) the distribution of the products of the industry. The raw materials would be goods which would be comprised in Entry 27 of List II. The process of manufac-

(1) [1970] 2 S.C.R. 100.

(2) [1956] S.C.R. 393,420.

ture or production would be comprised in Entry 24 of List 11 except where the industry was a controlled industry when it would fall within Entry 52 of List I and the products of the industry would also be comprised in Entry 27 of List 11 except where they were the products of the controlled industries when they would fall within entry 33 of List 111. This being the position, it cannot be said that the legislation which was enacted by the <ORG> in regard to sugar and sugarcane could fall within Entry 52 of List 1. Before sugar industry became a controlled industry, both sugar and sugarcane fell within Entry 27 of List 11 but, after a declaration was made by <ORG> in 1951 by Act LXV of 1951, sugar industry became a controlled industry and the product of that industry viz., sugar was comprised in Entry 33 of List III taking it out of Entry 27 of List II."

<CITATION> (1), <NAME> case (supra) was referred to but the Court held that it was not necessary for the purposes of that case to attempt to define the expression "industry" precisely or to state exhaustively all its different aspects. The Court observed :

"But we are satisfied in the present case that the manufacture of gold ornaments by goldsmiths in India is a "process of systematic production" for trade or manu- facture and so falls within the connotation of the word "industry" in the appropriate legislative entries."

<CITATION> (2 the point was left open whether the, State legislature had or had not the authority to legislate adversely on matters falling within entry 52 List I.

None of these cases assist the petitioners. The fact that the plantation is run as an integrated unit was strongly relied on but this cannot impinge upon and take away the legislative power of the <ORG> in respect of List II entry 18.

<ORG> in <ORG> v. v. Attorney General(3) dealing with a similar matter observed "But their Lordships can find neither principle nor authority to support the competence of <ORG> to legislate on a matter which clearly falls within the enumerated heads in s. 92 and cannot be brought (1)  1 S.C.R. 479.

(3) [1950] A.C. 122, 123, 140.

(2) [1968] 3 S.C.R. 712.

within any of the enumerated heads in s. 91 merely because the activities of one of the parties concerned in the matter have created a unified system which is widespread and important in the Dominion."

The facts in that case are set out briefly in the head note follows :

,,The appellant, <ORG>, which owned and managed <ORG> in Victoria, British Columbia, while not denying that the regulation of hours of work was ordinarily a matter of "property and civil rights in the province" under head 13 of s. 92 of the British North America Act, 1867, and accordingly within the legislative competence of the provincial legislature, contended, inter-alia, that the company's activities had become such an extensive and important element in the national economy of Canada that <ORG> was entitled under the general powers conferred by the first part of s. 91 of the Act of 1867 to regulate all the affairs of the company, even where that involved legislating in relation to matters exclusively reserved to the provincial legislatures by s. 92 ."

It is not necessary to consider the situation where <ORG> legislation on a topic in List 11 makes the control of industry by the <ORG> virtually impossible. No such question arises now.

Coming now to the question of repugnancy : The object of the Tea Act , 1953, is to-provide for the control by the <ORG> of the tea industry, including the control, in pursuance of the international agreement now in force, of the cultivation of tea in and the export of tea from India. Chapter 11 sets up <ORG>. Section 10 sets out the functions of the Board. Broadly the duty of the Board is to promote by such measures as it thinks fit the development under the control of <ORG> of tea industry. Measures contemplated are listed in sub-s. (2) as follows :

" (2) Without prejudice to the generality of the provisions of sub-section (1), the measures referred to therein may provide for-

(a) regulating the production and extent of cultivation of tea;

(b) improving the quality of tea;

(c) promoting co-operative efforts among growers and manufacturers of tea; as

(d) undertaking, assisting or encouraging scientific, technological and economic research and maintaining or assisting in the maintenance of demonstration farms and manufacturing stations;

(e) assisting in the control of insects and other pests and diseases affecting tea;

(f) regulating the sale and export of tea;

(g) training in tea tasting and fixing grade standards of tea;

(h) increasing the consumption in India and elsewhere of tea and carrying on propaganda for that purpose;

(i) registering and licensing of manufacturers, brokers, tea waste dealers and persons engaged in the business of blending tea;

(j) improving the marketing of tea in India and elsewhere;

(k) collecting statistics from growers, manufacturers, dealers and such other persons as may be prescribed on any matter relating to the tea industry; the publication of statistics so collected or portions thereof or extracts therefrom;

(1) securing better working conditions and the provisions and improvement of amenities and incentives for workers;

(m) such other matters as may be prescribed."

Chapter III contains provisions to enable control to be exercised over the extension of tea cultivation. Section 15(1)(a) proceeds on the basis that land which is planted with tea can be compulsorily acquired for in that eventuality the owner of the tea estate in which such land is situated is permitted to apply to the Board for permission to plant tea on land not planted with tea. Tea Act does not prohibit voluntary sale or compulsory acquisi-

tion.

We may mention that no body has challenged the validity of the Tea Act and we are proceeding on the basis that the Act is valid. In this connection entry 14 of List I (...... implementing of treaties...... ) may be kept in mind. If the Act is within the competence of <ORG> and the impugned Act is within the competence of the <ORG> the petitioners must show that the impugned Act is repugnant to the Tea Act but we can see no conflict between the provisions of the impugned Act and the Tea Act .

in <CITATION> (1) the validity of Assam Land (Requisition and Acquisition) Act , 1948 was challenged partly on the ground that it was ultra vires <ORG> insofar as it provided for the requisitioning and acquisition of tea estate. As it was a pre Constitution Act and there was no Federal Law then declaring that the development of tea industry was expedient in the public interest, the Act was held to be constitutionally valid. The Court then examined the question whether the impugned Act would continue in force, under art. 372 of the Constitution in face of the Tea Act of 1953. This Court held that the impugned Act provided only for requisition or acquisition of lands in public interest and' it had nothing to do with tea industry. After examining the scheme of the Act, <NAME>, J., observed :

"It is, therefore, manifest that the Tea Act mainly concerned with the development of the tea industry, and it has nothing to do with the requisition or acquisition of lands, though the said lands may form part of a tea estate or used for purposes incidental to the tea industry. Indeed, s. 1  5 (1) (b) of the Tea Act provides for the contingency of a part of a land on which tea is planted being compulsorily acquired under the provisions of the Land Acquisition Act , 1894 (Act 1 of 1894) or by any other law for the time being in force and no longer carries tea. In such an event, the said section authorises the owner of the tea estate in which such land is situate to apply to the <ORG> for permission to plant tea on land not planted with tea. The Tea Act , therefore, not only does not expressly prohibit the acquisition of any land, but also in express terms provided for the replacement of the area acquired by other land for the purpose of tea plantation." "A comparative study of both the Acts makes it clear that the two Acts deal with different matters and were passed for different purposes."

It was said that there is conflict because it is <ORG> and not <ORG>, which should determine what land is necessary for the efficient working of the plantation but <ORG> has not chosen, even if it could, to say so.

For the reasons mentioned above we have come to the con- clusion that <ORG> was competent to enact the impugned Act and that it is not repugnant to the Tea Act .

(1) [1962] 3 S.C.R. 88.

Coming to the second point, namely whether the impugned Act is protected from challenge under art. 3 1 A of the Constitution, three points arise out of the contentions of the parties : (1) Do the lands acquired fall within the expression "janmam right" in art. 31 A (2) (a) (i) ? (2) If not, do they fall within the expression "testate" as defined in art. 31A(2) ? and (3) If not, do any of the 'lands fall within the lands described in art. 31 A (2) (a) (iii) ? Art. 31A(2) may be set out for the sake of convenience. "31A(2) In this article,-

(a) the expression "estate" shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include-

(i) any jagir, janam or muafi or other similar grant and in the States of Madras and Kerala, any Janmam right; any land held under ryotwari settlement;

(iii) any land held or let for purposes of agriculture or for purposes ancillary thereto, including waste land, forest land, land for pasture or sites of buildings and other structures occupied by cultivators of land, agricultural labourers and village artisans;

(b) the expression "rights", in relation to an estate, ,shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure-holder, (<ORG>, under <ORG>) or other intermediary and any rights or privileges in respect of land revenue."

Dealing with the first point there is no doubt that <NAME> was a janmi when the First Concession was granted to the predecessor-in-interest of the petitioner, and if nothing had transpired after that the whole lands would have fallen within the expression 'janmam right'. But the Royal Proclamation dated September 24, 1899, changed the situation. The Poonjar Chief surrendered certain rights which he had been exercising over the tract known as Anjanad and Kannan Devan Mills. What is the effect of this surrender ? According to the learned Advocate-General, the janmam rights still subsisted and instead of the Poonjar Chief H.H. the Maharaja became the janmi. The nature of 'janmam right' has been examined by this <ORG> previously in <CITATION> (1). <NAME>, J., as he then was, speaking for the <ORG>, observed :

(1) [1960] 3 S.C.R. 887.

"Under the definition, any janmam right in Kerala is an "estate". A janmam right is the freehold interest. in a property situated in Kerala. <NAME> in his "Malabar Law and Custom" describes it as a hereditary proprietorship. A janmam interest may, therefore, be described as "proprietary interest of a landlord in lands", and such a janmam right is described as "estate" in the Constitution. Substituting "janmam right" in place of "estate" in cl. 2

(b), the "rights" in art. 3 1 A ( 1 ) (a) will include the rights of a proprietor and subordinate tenure holders in respect of a janmam right. It follows that the extinguishment or modification of a right refers to the rights of a proprietor or a subordinate tenure-holder in respect of a janmam right. A proprietor called the janmi or his subordinate tenure-holder has certain defined rights in a "janmam right". Land- tenures in Malabar are established by precendents or immemorial usage. Janmam right is a freehold interest in property and the landlord is called "janmi". He can create many subordinate interests or tenures therein."

In the Travancore Land Revenue Manual Volume 4 it is, stated "9. A <NAME> differs from such landlords in that he does not derive his title to lands from the <NAME> & Co. His title to the <NAME> lands is inherent. ..............

12. Janmam lands are precisely what are in Europe called allodial properties as contra- distinguished from feudal.

13. It must be clear from what has been stated that all the lands in the Travancore belonged to a body of janmis. There are no lands that do not belong to some janmi or other.

14. Be it remembered that the <ORG> itself is one of these janmis, it having come to possess <ORG> lands by gift, purchase, escheat, confiscation and other ways. It is only a great janmi, great in the sense that its <ORG> property is extensive.

15. If any person wants land in Travancore, he must obtain it from, and hold it of, some one of the body of Janmis, i.e. from the Sircar, which is the Chief Janmi, or from some other Janmi." (Sir <NAME> Memo.) In Mr. <NAME> Memo on Land 'Tenures it is stated:

"At present the Sircar is the largest Janmi in the State. The janmam lands of all the petty Rajas subdued in the last few centuries and of several Madampies, have lapsed to the State, and other causes such as escheat & c, have tended ,to increase the extent of the Janmam possession of the Sircar. About three- fourths of the whole land in the State belong on Janmam to the Sircar, the remaining one-

fourth being distributed among the classes mentioned in para 32 It is interesting to note that in certain parts of Madras Janmam rights existed 'and the 'Government lands were called government janman lands. (See Government Order No. 1902 Revenue dated November 1, 1926) Para 3 of that order deals with the janmam estates and reads as under :

"3. JANMABHOGAM.-Paragraph 11 of 'the Board's Proceedings-"Lands have neither to been des- cribed as-

(a) Government Janmam, i.e. lands which are held directly from the Government and on which taram assessment and janmabhogam are paid to the Government and

(b) private janmam, i.e. lands which are held directly from the Government and on which taram assessment but not janmabhogam is paid to the Government."

It seems to us that on the material placed before us it is difficult to resist the conclusion that the lands in dispute fall within the expression "Janmam right". If, as stated in Travancore Land Revenue Manual Volume IV, there are no lands that do not belong to a Janmi and the <ORG> becomes a janmi by gift, escheat confiscation or otherwise, the effect of the Royal Proclamation of 1899 must be that the <ORG> became the Janmi. We are not concerned here with lands which were held by the Full Bench of <ORG> in <NAME> v. State of Kerala(1) to be held under Ryotwari tenure after the introduction of the Ryotwari Settlement in the Malabar area of Kerala State. Assuming that the lands do not fall with Janmam Right', we may now deal with the second point: In the Travancore Land Revenue Manual, Vol. III, Revised Edition, 1936, Registered Lands are described as follows (1) A.I.R. [1963] Kerala 101.

"Registered lands are lands registered in the revenue accounts as held by or granted to individuals` families, corporations or institutions, and comprise all the different kinds of tenures bearing either the full assessment or wholly or partially free of assessment. These lands comprise not only the areas brought under cadastral survey but include also coffee, tea, rubber and other estates, cardamom gardens and other special grants outside the limits of cadastral survey."

The Registered Lands include inter alia, (a) Pandaravaka lands and (b) Janmam lands. Regarding Pandaravaka lands it is stated :

"Pandaravaka or Sircar lands are, lands of which the <ORG> is the landlord or the Jenmi and whatever rights which vest in the ryots are derived from the Sircar."

<ORG> is dealt with under this heading, i.e. Pandaravaka Lands.

The janmam lands ate dealt with as follows:

"19. Definition.-<ORG> land is defined in the Jenmi and Kudiyan Regulation, V of 1071 as "land (other than Pandaravaka, Sripandaravaka, Kandukrishi or <ORG> Devaswom land, recognised as such in the <ORG> accounts) which is either entirely exempt from Government tax or if assessed to public revenue, is subject to <ORG> only, and the occupancy right in ;which is created for a money consideration (Kanom) and is also subject to the payment of Michavaram or custo- mary dues and the payment of the renewal fees. "This definition is intended for the purposes of the Regulation, which regulates the relations between janmis and their Kanapattom tenants. A Janmi has not only Kanapattom tenanats but has other tenants as well holding on Adima, Anubhogam, Thiruvulam and similar other. tenures and the Regulation is not concerned with the latter class of tenants in whose case the ordinary law of landlord and tenant is applicable. Revenue law, on the other hand, makes no distinction between a Kanapattom tenant and a non-Kanapattom tenant if he holds under a Janmi recogonised in the revenue accounts. Hence for revenue purposes, <ORG> lands are lands that are entered in the revenue accounts under the heads of <NAME>, <NAME> and Madampimar- vaka i.e. to say a land to be classed as <ORG> land should have been recognised as such in the revenue accounts. The mere circumstance that a land belongs.

to a <ORG> does not bring it under <ORG> tenure and conversely the mere fact that <ORG> land is absolutely transferred to a non-<ORG> does not any the less detract from its original character. <ORG> lands are allodial properties and the proprietary right in them is considered as inherent in the individual and not derived from the <ORG>."

It thus appears that the State grants like Kanan Devan Hills Concession and Ten Square Miles Concession, and Munro Lands, were treated under the heading 'Pandaravaka Lands, i.e. lands belonging to the Sircar.

The case of Pandaravaka lands from the erstwhile <ORG> of Cochin was considered by this <ORG> in <CITATION> (1). Some of the lands in dispute there were classified by the land records maintained by the state as Pandaravaka holdings while the remaining lands were classified as Puravaka holdings. The petitioner there claimed that the lands did not constitute an 'estate' under art. 3 1 A (2) (a). His case was that as regards Pandaravaka lands he was liable to pay rent to the <ORG> calculated as a proportion of the gross yield of the pro- perties and the lands held by him as tenant under the <ORG> could not be an estate. It was further contended that he was not an intermediary between the <ORG> and the tiller of the soil and therefore the lands did not come within the purview of art. 31 A (2) (a). Under clause 13 of the proclamation dated March 10, 1905, the holders of Pandaravaka Verumpattom tenure acquired full rights to the soil of the lands and held them subject to the liability to pay <ORG> assessments. This <ORG>, by majority, held that the holders of land held as Pandaravaka Verumpattom were proprietors of the lands and held the, lands subject to the liability to pay the assessment to the <ORG>, and therefore Pandaravaka Verumpattom would be regarded as local equivalent of an estate under cl. (2) of Art. 31A. Gajendragadkar, J., as he then was, speaking for the. <ORG>, observed :

"It seems to us that the basic concept of the word "estate" is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the <ORG> paying land revenue to it except where it is remitted in whole or in part. If therefore a term is used or defined in any existing law in a local area which corresponds to this basic concept of "estate" that would be the local equivalent of word "estate" in that area. It is not necessary that there must be an intermediary in an estate before it can be called an estate within (1) [1962] Supp. 1 S.C.R .753.

the meaning of Art. 3 1 A (2) (a); It is true that in many cases of estate such intermediaries exist, but there are many holders of small estates who cultivate their lands without any intermediary whatever. It is not the presence of the intermediary that determines whether a particular landed property is an estate or not; what determines the character of such property to be an estate is whether it comes within the definition of the word " estate" in the existing law in a particular area or is for the purpose of that area the local equivalent of the word " estate" irrespective of whether there are intermediaries in existence or not."

It seems that if it is held that the- land does not fall within the expression 'janmam right' it may possibly be covered by the decision of this Court in <NAME> case (<NAME>) but as arguments were not addressed to us on this point we do not express our final opinion. The next question which arises is : If the lands acquired by the impugned Act are an estate, is the impugned Act a law for effecting agrarian reforms ? Section 9 of the impugned Act envisages three purposes :

(1) reservation of lands for promotion of agriculture; (2) reservation of land for the welfare of agricultural population;

(3) assignment of remaining lands to agriculturists and agricultural labourers.

Do the first two purposes fall within the concept of agrarian reforms ?

Flood control and prevention of erosion are undoubtedly of great importance for promoting agriculture and yet it was held by this Court in <CITATION> (1) that the Assam Acquisition of Land for Flood Control and Prevention of Erosion Act had no relation to agrarian reforms, land tenure or the elimination of intermediaries. Acquisition for housing scheme and slum clearance in the city of Madras, though of great social and economic importance, was not included in the concept of agrarian reform by this Court in <CITATION> (2 ) But a wide meaning was given to the concept in <CITATION> (3). The transfer of <ORG> owned by the proprietors to the village panchayat for the purpose of management in the manner stated in the Consolidation of Holdings Act and (1)  1 S.C.R. 561. (2) , 1 S.C.R. 614. (3)  1 S.C.R. 82,94.

LI286 Sup CI/72 conferment of proprietary rights in respect of lands in the Abadi deh was treated as effecting agrarian reforms. <NAME>, J., as he then was, observed :

"The scheme of rural development today envisages not only equitable distribution of land so that there is no undue imbalance in society resulting in a landless class on the one hand and a concentration of land in the hands of a few on the other, but envisages also the raising of economic standards and bettering rural health and social conditions. Provisions for the assignment of lands to village <ORG> for the use of the general community, or for hospitals, schools, manure pits, tanning grounds etc. enure for the benefit of rural population must be considered to be an essential part of the redistribution of holdings and open lands to which no objection is apparently taken. If agrarian reforms are to, succeed, mere distribution of land to the landless is not enough. There must be a proper planning of rural economy and conditions and a body like the village <ORG> is best designed to promote rural welfare than individual owners of small portions of lands."

The definition of "common purpose" is reproduced below for convenience : "Common purpose" means any purpose in relation to any common need, convenience or benefit of the village and include the following purposes

(i) extension of the village Abadi;

(ii) providing income for the Panchayat of the, village concerned for the benefit of the village community.

(iii) village roads and paths; village drains; village wells, ponds or tanks; village water courses or water channels; village bus stands and waiting places; manure pits; hada rori; public latrines; cremation and burial grounds; panchayat ghar; Janj Ghar, grazing grounds; tanning places; meta grounds; public places of religious or charitable nature; and

(iv) schools and play-grounds, dispensaries, hospitals and institutions of like nature, water works or tube-wells whether such schools, play-grounds, dispensaries, hospitals, institutions, water- works or tube-wells may be managed and controlled by <ORG> or not."

We are bound by the judgment. What are the, implications of this judgment ? All the purposes mentioned above were held to be comprised within the concept of agrarian reform. It is urged that the wording of the first two purposes in, S. 9 is too wide. But if we look at the definition of "common purpose", which was sustained by this <ORG> in <NAME> case, it shows that the purposes sustained thereby would come tinder either the expression "promotion of agriculture" or "welfare of agricultural population" in s. 9. Indeed some would fall under both. For instance, reservation of lands for manure pits, water works or wells, village water courses or water channels and grazing grounds would promote agriculture; schools and playgrounds, dispensaries, public latrines etc. would be for the welfare of agriculturists.

If the State were to use lands for purposes which have no direct connection with the promotion of agriculture or welfare of agricultural population the State could be restrained from using the lands for those purposes. Any fanciful connection with these purposes would not be enough. It seems to us that if we read these two purposes to mean that these include only "common purposes", which were sustained by this <ORG> and purposes similar thereto it would be difficult to say that they are not for agrarian reform. In a sense agrarian reform is wider than land reform. It includes besides land reform something more and that something more is illustrated by the definition of "common purpose", which was sustained by this <ORG> in <NAME> case (supra).

<CITATION> (1), the acquisi- tion of a grant in the nature of <NAME> was upheld. It was observed:

"Mr. <NAME> further urges that the, acquisition of the estate was not for the purposes of agrarian reforms because hundreds of square miles of forest are sought to be acquired. But as we have held that the area in dispute is a rant in the nature of Jagir or inam, its acquisition like the acquisition of all Jagirs, inams, or similar grants, was a necessary step in the implementation of the agrarian reforms and was clearly contemplated in art. 31A."

(1) [1967] 1 S.C.R. 362, 372.

These observations must be understood in the light of the provisions of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, for the impugned Act in that case (U.P. Act No. 1 of 1964) had amended S. 3 (8) of that Act of 1950. This grant in the nature of the jagir stood in the same position as all the big zamindaris and jagirs in Uttar Pradesh. It has never been urged that the Act of 1950 was not a measure of agrarian reform.

The third object-settlement of agriculturists and agricultural labour it seems to us, is clearly covered by the expression "agrarian reforms". The main object of agrarian reforms has been to acquire excess land and settle landless labourers and agriculturists. We are accordingly of the opinion that the three purposes the. first two reads as we have indicated-are covered by the expression "agrarian reform" and the legislation is protected from challenge by art. 31-A. In the result the petition fails and is dismissed, but there will be no order as to costs.

S.C. Petition dismissed.