Vesting under land reforms law bars fresh settlements by former proprietors; estoppel, agency and ostensible ownership fail.

After vesting of an estate under the Bihar Land Reforms Act, the former proprietor has no authority to create fresh rights in the vested property, and later acts of revenue collection do not create estoppel against the State. The former proprietor cannot be treated as an implied agent, constructive trustee, or ostensible owner where the State gave no consent or representation supporting the settlement. A transaction entered into on that basis is void from inception, but money paid under such a void arrangement may be recoverable in restitution under Section 65 where the defect relates to the property transferred; a claim for interest requires a separate contractual, customary, or legal basis.

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Issues: (i) whether the Raja had any authority, after vesting of the estate under the Bihar Land Reforms Act, 1950, to grant a valid lease or licence for collection of biri leaves and whether the State was estopped from denying the settlement; (ii) whether the Raja could be treated as an implied agent, constructive trustee or ostensible owner so as to sustain the plaintiff's arrangement under the general law; (iii) whether the plaintiff was entitled to restitution of the sums paid to the Raja and whether interest could be awarded.

Issue (i): whether the Raja had any authority, after vesting of the estate under the Bihar Land Reforms Act, 1950, to grant a valid lease or licence for collection of biri leaves and whether the State was estopped from denying the settlement.

Analysis: Vesting took effect on publication of the notification under Section 3(1), and the consequences of vesting followed under Section 4. The State's subsequent demand or receipt of revenue and cess did not amount to a representation capable of founding estoppel, particularly because there can be no estoppel against a statute. The alleged acts of the local officers did not mislead the Raja into believing that title remained with him, and the plaintiff also could not rely on those acts when the legal position was clear and publicly known. The estate had already vested in the State when the lease was executed, and the Raja had no transferable interest in the jungles.

Conclusion: The Raja had no authority to grant a valid settlement after vesting, and the State was not estopped from denying the plaintiff's title.

Issue (ii): whether the Raja could be treated as an implied agent, constructive trustee or ostensible owner so as to sustain the plaintiff's arrangement under the general law.

Analysis: No material showed any representation by the State that the Raja was acting on its behalf, nor any conduct by the State that induced the plaintiff to believe that the Raja had authority to settle the forest produce. The ingredients of implied agency were absent, as the Raja never acted in a representative capacity for the State. There was likewise no fiduciary relationship to support a constructive trust. The rule relating to transfer by an ostensible owner was inapplicable because there was no consent, express or implied, by the true owner, and the plaintiff failed to establish good faith and reasonable care in ascertaining the Raja's authority.

Conclusion: The contentions of implied agency, constructive trust and ostensible ownership failed, and the lease could not bind the State.

Issue (iii): whether the plaintiff was entitled to restitution of the sums paid to the Raja and whether interest could be awarded.

Analysis: The lease was void from inception because the Raja had no right to deal with the property after vesting, and the plaintiff, on discovery of that defect, was entitled to invoke restitution. Section 65 applied because the incapacity related to the property transferred and not to any general incapacity to contract. The plaintiff had paid the same amount twice for the same season, and the Raja could not retain a benefit obtained under a void transaction. As to interest, there was no contract, no usage, and no substantive basis justifying an award for the period claimed.

Conclusion: Restitution against the Raja was payable for the principal sums, but the claim for interest was rightly rejected.

Final Conclusion: The State's liability was negatived, the plaintiff's principal claim against the State failed, and the decree was confined to restitution against the Raja with the cross-objections on interest rejected.

Ratio Decidendi: Once vesting under the Bihar Land Reforms Act took place by notification, the former proprietor retained no authority to create fresh rights in the vested property, and neither estoppel, implied agency nor ostensible ownership can validate such a settlement or defeat restitution for money paid under a transaction void from its inception.

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