Tenancy interest and escheat: dissolved company's leasehold can vest in the State, making the State a necessary party in possession suits.

A tenancy interest is property capable of transmission and may vest in the State by escheat or bona vacantia on dissolution of the holder, unless a statute expressly excludes that result. The court treated a dissolved company's thika tenancy as not reverting to the landlords but vesting in the State. Once the tenancy vested in the State, the State became a necessary party to any effective suit concerning possession, and the landlords could not pursue recovery against an alleged trespasser while their immediate right to possession had not accrued. The suit was therefore not maintainable without impleading the State.

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Issues: (i) Whether the interest of a dissolved company holding the suit land as a thika tenant extinguished on dissolution or vested in the State by escheat or as bona vacantia. (ii) Whether the landlords' suit for recovery of possession could proceed without impleading the State, and whether they could maintain the suit against the defendant as a trespasser during the subsistence of the tenancy vested in the State.

Issue (i): Whether the interest of a dissolved company holding the suit land as a thika tenant extinguished on dissolution or vested in the State by escheat or as bona vacantia.

Analysis: The expression "property" in the law of escheat and bona vacantia was treated as wide enough to include every transmissible interest, including a tenancy interest. The Constitution recognizes vesting of property by escheat or as bona vacantia in the State under Article 296. The Court relied on the settled principle that the property of a dissolved corporation, and the interest of an intestate without lawful heirs, passes to the Government by escheat or bona vacantia. The historical legislation governing tenancies was read as showing that tenancy interests were capable of vesting in the State, and that earlier provisions excluding such vesting had been expressly enacted and later repealed.

Conclusion: The thika tenancy interest of the dissolved company did not revert to the landlords but vested in the State by escheat or as bona vacantia.

Issue (ii): Whether the landlords' suit for recovery of possession could proceed without impleading the State, and whether they could maintain the suit against the defendant as a trespasser during the subsistence of the tenancy vested in the State.

Analysis: Once the tenancy was held to have vested in the State, the State became the person in whom the tenancy interest subsisted and was therefore a necessary party to any effective adjudication concerning possession. In the absence of the State, the defect of non-joinder could not be cured in the circumstances. The landlords also could not maintain a direct claim against the alleged trespasser while the tenancy continued in the State's favour, because their immediate right to possession had not accrued.

Conclusion: The suit was not maintainable without the State as a party and failed against the defendant.

Final Conclusion: The appeal was dismissed and the decrees of the courts below were affirmed, with the cross-objection also dismissed as not pressed.

Ratio Decidendi: A tenancy interest, being property capable of transmission, can vest in the State by escheat or bona vacantia on dissolution of the holder unless a statute expressly provides otherwise, and a suit concerning such tenancy is not effectively maintainable without impleading the State as the necessary party.

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