Statutory forfeiture and invalid transfer: land forfeiture upheld, but forfeiture of purchase money struck down.

A statutory forfeiture under the Bombay Tenancy and Agricultural Lands Act was upheld where an invalid transfer triggered reversion of the land and the forfeiture operated as a consequence authorised by law, not as an unconstitutional acquisition without compensation under Article 31(2). By contrast, the attempted forfeiture of the purchase money, and its recovery as arrears of land revenue, was invalid because the statute did not clearly prohibit the purchaser's act or provide a complete basis for penal forfeiture; the money was treated as belonging to the purchaser on failure of consideration. The challenge therefore succeeded only in relation to the money forfeiture.

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Issues: (i) Whether the forfeiture of land under section 84C of the Bombay Tenancy and Agricultural Lands Act, on a sale declared invalid, violated Article 31(2) of the Constitution. (ii) Whether the forfeiture of the purchase money received by the transferor, and its recovery as arrears of land revenue, was valid under Article 31(1) of the Constitution.

Issue (i): Whether the forfeiture of land under section 84C of the Bombay Tenancy and Agricultural Lands Act, on a sale declared invalid, violated Article 31(2) of the Constitution.

Analysis: The prohibition on alienation contained in the Act, read with section 84C, rendered an invalid transfer ineffective, with the land reverting to the occupant and the forfeiture operating upon the occupant after reversion. That consequence was treated as a deprivation of property authorised by law rather than an unconstitutional acquisition for public purpose without compensation.

Conclusion: The forfeiture of the land was upheld and was not violative of Article 31(2) of the Constitution.

Issue (ii): Whether the forfeiture of the purchase money received by the transferor, and its recovery as arrears of land revenue, was valid under Article 31(1) of the Constitution.

Analysis: The purchase price, once the sale was declared invalid, belonged to the purchaser on the footing of failure of consideration. Section 84C(3)(b) was held to be incomplete in so far as it purported to forfeit that money, because the statute did not prohibit the purchaser's act or otherwise provide a complete basis for penal forfeiture against him.

Conclusion: The forfeiture of the purchase money and its recovery as arrears of land revenue were invalid and were quashed.

Final Conclusion: The challenge succeeded only to the extent of the money forfeiture and its recovery, while the forfeiture of the land itself was sustained.

Ratio Decidendi: A statutory forfeiture of property may stand where it follows from a valid prohibition and an invalid transfer, but a forfeiture of money cannot be sustained unless the law clearly identifies the prohibited act and the person liable to the consequence.

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