1953 (4) TMI 27 - SC - Companies Law

Supreme Court Upholds Bihar Land Reforms Act Validity

MOTIPUR ZAMINDARI CO. LTD. Versus THE STATE OF BIHAR

The Supreme Court upheld the validity of the Bihar Land Reforms Act, dismissing appeals challenging the legislative competency of the Bihar Legislature, ... - Issues Involved:1. Legislative Competency of the Bihar Legislature2. Definition and Inclusion of Companies under 'Proprietor' and 'Tenure-holder'3. Applicability of the Act to Companies4. Apportionment of Revenue and Rent for Estates in Multiple StatesDetailed Analysis:1. Legislative Competency of the Bihar Legislature:The main contention was whether the Bihar Legislature had the authority to legislate on the subject matter of the Bihar Land Reforms Act, specifically concerning companies incorporated under the Indian Companies Act. The appellants argued that the Bihar Legislature invaded the Union field, which was exclusively under Parliament's jurisdiction as per entries 43, 44, and 45 of List I. However, this contention was overruled by the Patna High Court and was not challenged further in the Supreme Court.2. Definition and Inclusion of Companies under 'Proprietor' and 'Tenure-holder':The appellants argued that the terms 'proprietor' and 'tenure-holder' as defined in the Act did not include companies. Section 2(o) defines 'proprietor' as a person holding or owning an estate, including heirs and successors-in-interest, and section 2(r) defines 'tenure-holder' similarly. The appellants contended that the word 'person' did not include companies in this context. The Supreme Court rejected this argument, stating that companies could own estates and thus were included within the definition. The Court emphasized that the term 'proprietor' was broad enough to encompass companies, despite the absence of specific references to directors or liquidators in the definition.3. Applicability of the Act to Companies:The appellants further argued that the Act was not intended to apply to companies, citing various sections and rules that they claimed only natural persons could comply with. They relied on the case of Pharmaceutical Society v. The London and Provincial Supply Association, Limited, where the word 'person' was interpreted to exclude corporations. However, the Supreme Court found this reliance misplaced, noting that the object of the Bihar Act was not repugnant to the inclusion of companies. The Court held that companies could perform all required acts through their directors or agents and that the provisions of the Companies Act could be considered in interpreting the Bihar Act.4. Apportionment of Revenue and Rent for Estates in Multiple States:In Appeal No. 63 of 1953, the appellant company argued that because its estates were situated in both Bihar and West Bengal, and it paid a single government revenue, the acquisition of only the Bihar portion was invalid. The Supreme Court dismissed this argument, stating that it was a matter of apportionment of revenue and rent, which did not affect the validity of the notification. The Court held that the necessity for apportionment did not invalidate the acquisition under the Act.Conclusion:The Supreme Court upheld the validity of the Bihar Land Reforms Act and dismissed the appeals. The Court found no merit in the arguments that the Act did not apply to companies or that the inclusion of companies was repugnant to the Act's context. The Court also dismissed the contention regarding the apportionment of revenue and rent for estates situated in multiple states. The appeals were dismissed with costs.