2008 (2) TMI 859 - SC - Indian Laws

Court rules co-ownership doesn't form association of persons under Ceiling Act

RAMANLAL BHAILAL PATEL & ORS Versus STATE OF GUJARAT

RAMANLAL BHAILAL PATEL & ORS Versus STATE OF GUJARAT - 2008 AIR 1246, 2008 (2) SCR 468, 2008 (5) SCC 449, 2008 (2) JT 222, 2008 (2) SCALE 282 Issues Involved:1. Interpretation of the word 'person' in the Gujarat Agricultural Lands Ceiling Act, 1960.2. Whether co-ownership constitutes an 'association of persons/body of individuals' and therefore a 'person.'3. Whether the ten purchasers together constitute a 'body of individuals/association of persons' and thus a 'person' under the Ceiling Act.4. Effect of section 8 of the Ceiling Act on partitions made to defeat the object of the Act.5. Validity of the purchase by non-agriculturists under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948.Detailed Analysis:1. Interpretation of the word 'person' in the Gujarat Agricultural Lands Ceiling Act, 1960:The definition of 'person' in the Ceiling Act is inclusive, meaning 'a person includes a joint family.' The Court clarified that an inclusive definition indicates an intention to enlarge the meaning of the word used in the Statute. Therefore, the word 'person' must be construed as comprehending not only its ordinary meaning but also those things which the interpretation clause declares it shall include. The Court held that the definition of 'person' in the Ceiling Act includes:- A natural human being.- Any legal entity capable of possessing rights and duties, including any company or association of persons or body of individuals (whether incorporated or not).- A Hindu Undivided Family or any other group or unit of persons, the members of which by custom or usage, are joint in estate and residence.2. Whether co-ownership constitutes an 'association of persons/body of individuals' and therefore a 'person':The Court explained that co-ownership arises when several persons acquire undivided shares in a property. Co-ownership does not automatically make the co-owners an 'association of persons/body of individuals' unless there is a common intention to have a joint venture or carry on some common activity with a common understanding and purpose. The Court concluded that mere purchase under a common deed without anything more does not convert co-ownership into a joint enterprise.3. Whether the ten purchasers together constitute a 'body of individuals/association of persons' and thus a 'person' under the Ceiling Act:The Court examined whether the ten purchasers, who bought the land jointly but intended to divide it and hold their respective shares separately, could be considered an 'association of persons/body of individuals.' The Court found that the purchasers did not intend to retain the property in co-ownership or carry on agricultural activities jointly. They purchased the land jointly for convenience in negotiations and not to cultivate it jointly. After purchase, they divided the land and registered their respective shares. Therefore, the Court held that the ten purchasers did not constitute an 'association of persons/body of individuals' and should not be treated as a single 'person' under the Ceiling Act.4. Effect of section 8 of the Ceiling Act on partitions made to defeat the object of the Act:The Court noted that the partition among the co-owners on 30.12.1971 fell within the period specified in section 8 of the Ceiling Act. Sub-section (1) of section 8 presumes that any partition made between 24.1.1971 and the date the Amendment Act came into force was intended to defeat the object of the Act unless proven otherwise. Since no application was made under sub-section (2) to seek a declaration that the partition was not made in anticipation to defeat the Act, the partition must be ignored while computing the surplus land.5. Validity of the purchase by non-agriculturists under section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948:The Court directed the Mamlatdar to hold an enquiry under sections 63 and 84C of the Tenancy Act to determine whether any of the ten purchasers were non-agriculturists and if so, the extent of the transfer in their favor which would be invalid. The Mamlatdar must also determine whether any of the purchasers who are agriculturists hold excess land by considering their share in the lands purchased as co-owners, along with other lands as provided in sections 6 to 8 of the Ceiling Act.Conclusion:The appeal was allowed, and the orders of the High Court and the authorities below were set aside. The Mamlatdar was directed to:- Determine whether any of the ten purchasers is a non-agriculturist and the extent of the invalid transfer.- Determine whether any of the agriculturist purchasers hold excess land by considering their share in the lands purchased as co-owners, along with other lands, and pass appropriate orders in accordance with the law.