For the purposes of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960, the Supreme Court bench comprising of Justices S. Abdul Nazeer and Krishna Murari, declared that if subletting violates the conditions of the Lease Deed, the sub-lessee remains the ostensible tenure holder of land and the lessee remains the true holder.
Harikishan Lal (Respondent No. 2) inherited the leasehold rights to the land awarded to Lala Khushi Ram by the Secretary of State of India pursuant to the Government Grants Act, 1895, via a lease deed dated 25.08.1920. Harikishan executed a sublease for 2.49 acres of land for agricultural purposes in favour of the appellants. Harikishan was served with a notice by the Prescribed Authority, Kashipur (Respondent No. 1), under Section 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 (“Ceiling Act”), declaring certain sections of land held by him superfluous. The Prescribed Authority proclaimed the same in an order dated 28.07.1978. The land sublet to the appellants was part of the surplus land identified. The appellants filed an application with the Prescribed Authority under Section 11(2) of the Ceiling Act, 1960, after learning of the situation, which was denied.
The case was then taken before ADJADJ, that is, the Additional District Judge who dismissed the case. Simultaneously, the High Court was approached but meanwhile, the State of Uttranchal came into bringing and the land’s jurisdiction shifted to the state. The petition was transferred but later rejected for want of defence. After the restoration was disapproved, the Supreme Court finally restored the petitions. The High Court then gave the verdict for the case. It refused to provide benefits to a sub-lessee whose sub-lease was in violation of the Lease deed’s Clause 9 stipulations.
In the appeal to the Supreme Court, the sides again put their arguments. The appellant’s counsel contended that they were ‘tenure holders’ under Section 3(17) and ‘holdings’ under Section 3(9) of the Ceiling Act, citing the definitions of ‘tenure holder’ in Section 3(17) and ‘holding’ in Section 3(9). (17). It was also claimed that as independent tenure holders, they were qualified for ceiling area assessments separate from Harikishan’s. The Counsel argued that Clause 9 of the Lease Deed’s twin requirement did not apply to subletting for agricultural purposes.
The Respondents’ counsel countered the appellants’ claim that they had obtained independent tenure rights by arguing that the appellants had failed to examine Section 5 of the Ceiling Act, which places the burden of proof on the appellants to establish that they were independent tenure holders. They were alleged to have failed to meet their burden of proof. Harikishan’s counsel contended that because Clause 9 of the lease deed clearly prohibited sub-leases established in the common course of agriculture, sub-leases executed in the ordinary course of agriculture cannot create independent tenure rights.
The court observed that the appellants had to meet the standards set out in both Clause 9 of the Lease Deed and Clause 5 of the sub-lease deed in order to be designated as independent tenure holders. It was further emphasised that, while the land could be rented for agricultural purposes under the terms of the Lease Deed, the sub-lessees would not become independent tenure holders.
Furthermore, Sections 2 and 3 of the Government Grants Act were amended with retrospective effect by U.P. Amendment Act 13 of 1960, implying that the rights and duties of the Government and the original lessee would be governed by the grant terms.
Lastly, the Court referred to the case Escorts Farms Ltd., Previously Known As M/S. Escorts Farms (Ramgarh) Ltd. V. The Commissioner, Kumaon Division, Nainital, U.P. And OrsOrs, the Court held that the original lessee had no authority to transfer the land without first completing the restrictions set forth in Clause 9 of the Lease Deed.