KANPUR SUGAR WORKS LTD. versus STATE OF BIHAR & ORS.

Citation: [1970] 3 S.C.R. 903 · Decided: 06-03-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

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KANPUR SUGAR WORKS LTD. 
v. 
STATE OF BIBAR & ORS. 
March 6, 1970 
[J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.] ' 
Bihar Land Reforms Act (30 of 1950), ss. 5(1) and 7(1)-'Uwl 
tlS factory-Scope _of. 
. 
The appellant was engaged in ~he business of manufacture of sugar, 
10 the respondent-State. 
It was in possession of Zamindari propertv. 
Part of the area in its possession consisted 
of 
two 
enclosures 
The 
,factory buildings were situated in the inner enclosure and the outer W•lS 
used for residential, quarters, garages, kitchens, clubs, dispensaries, retit 
houses, out houses, office buildings, tubewell and wate< 
tank, 
godown, 
oattle shed, weighbridge house etc. 
Under the notification issued under the Bihar Land Reforms Act, 
1950, the Zamindari vested in the State but homestead lands and lands 
of the factory remained in the occupation of the appellant. 
On the question whether the outer enclosure was homestead land 
not liable to assessment under s. 5 ( 1) of the Act or was liable to assess-
ment under s. 7 (I). 
HELD : Under s. 5 ( 1) an intermediary is entitled to retain posses-
sion of homestead lands as a tenant under the State free of rent; and 
under s. 7(1) an interme4iary is entitled to retain possession as a tenant 
buildings or structures together with the lands on which they stand, 
subject to. payment of such fair -and equitable ground rent as may be 
determined by the Collector if the'y are used as golas, factories or mills, 
for the purpose of trade, manufacture 
or 
commerce. 
The expression 
employed is 'used G·s' and not 'used for'. 
Therefore, merely ,because a 
factory has for the benefit of the workmen and managerial staff working 
in the factory, constructed buildings as quarters, clubs, kitchens, garage. 
dispensary, rest houses, out houses etc., they cannot he deemed to fall 
under s. 7 (I) when they are not directly used a.< factdry or mill build-
in~s. 
The definition of 'factory' in the Factories' Act whose object and 
scheme are entirely different, cannot be 
a guide 
in determining the 
n1eaning of the expression 'factory' as used in Bihar Land Refo1ms Act. 
r907 B-GJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. ~69 of 
1967. 
Appeal from the judgment and decree dated October 28. 
1965 of the Patna Hi~h Court in Misc. Judicial Case No. 1262 
of 1962.. 
M. C. Chagla, D. N. Mishra, J. B. Dadachanji and 0. C. · 
Mathur, for the appellant. 
D. Goburdhun, for the resiiondents. 
904 
SUPREME COURT REPORTS 
(1970] 3 S.C.R. 
The Judgment of the Court was del!vered by 
Shah, J. 
Kanpur Sugar Works Ltd.-a public limited Com-
pany-is engaged in the business of manufacturing sugar m 
village Marhowrah, District Saran, in the State of Bihar: Prior 
to 1956 it possessed a considerable -zamfndari property. 
Under 
a notification issued in exercise of the power under the Bihar 
Land Reforms Act 30 of 1950 the entire zam1'ndari vested in the 
State with effect from January 1, 1956. But by the provisions 
of the Act homestead lands and lands of the factory remained in 
the occupation of the Company. The Circle Officer commenced 
a rent assessment proceeding under the Bihar Land Reforms Act 
for determining. the rent payable by the Company. 
The Com-
pany cliamed to dassiiy lands ~n its occupation under three 
heads : (i) 12 bighas 9 kathas 7 dhurs on which the factory · 
buildings stood, and cin that account assessable to rent under 
s. 7 of the Bihar Land Reforms Act, 1950; (ii) 50 bighas 3 
kat!zas J 3 dl111rs of cultivable land under Khas cultivation of the 
Company liable to assessment of rent under s. 6 of the Ac!: and 
(iii) 71 big!za.· 2 katlws 12 dlmrs as homestead land not liable 
to assessment under sub-s. (I) of s. 5 of the Act. 
By order dated Februar; I 0, 196 J the Circle Officer fixed 
rent at the rate of Rs. 187-8-0 per acre in respect of 80 bighas 
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16 kat/zas 15·} d!z11rs of land under s. 7 of the Act. The Circle 
Officer rejected the contention of the Company that 7 I bighas 
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2 katlws 12 dlwrs of land on which there stood residential bunga-
lows, quarters, garage, kitchens, clubs, dispensary, rest house, out-
houses, oftice buildi!lgs, tube-well and water tank, godown, 
cattle-shed, weighbridge house etc. was homestead and was on 
that account exempt from liability to pay rent. 
Appeal against 
that order w:i; dismissed by the Collector of Saran by his order r 
dated August 6, 1962 
The Company then moved a petition in the High Cour

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