STATE OF ASSAM AND ORS. versus RAMESHWAR AGARWALA AND ORS.

Citation: [1971] 3 S.C.R. 306 · Decided: 06-01-1971 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

306 
STATE OF ASSAM AND ORS. 
v. 
RAMESHWAR AGARWALA AND ORS. 
January 6, 1971 
[J. C. SHAH, C.J. AND K. S. HEGDE, J.J 
. Assam Lend Revenue Regulations-Rule 
40 
framed thereunder-
Determination by Government of premium 
payable upon settlement of 
land for "special cultivation"-!/ rail? of premium mast be fixed for 
locality or can be fixed for tea garden-If premium can be fixed accord-
inR lo commercial value. 
A 
B 
The first respondent applied to the Deputy Commissioner, Lakliimpur 
C 
,! 
for sett~ment of a Tea Garden for "special 
cultivaticn of 
tea". 
In 
I"
March, 1964 the Government of Assam permitted the 
settlement 
on 
payment of Rs. 3.86 lakhs as premi"m. 
Upon the respondent failing to 
make payment of the amount, the State Government directed the auction 
of the tea garden. The first respondent thereafter moved a petition in the 
High Court for a declaration inter alia that the State Goven,iment had 
acted illegally in fixing the amount of premium. The High Court allow-
,F 
ed the petition holding that the order flying the premium was not jn con-
D 
~ 
formity with rule 40 framed under the Assam Land Revenue Regulations 
which required the State Government to fix the rate of premium for a 
particular locality; it did not empower the Government fo' nx''tlie ·pre-
mium payable by an intending holder in a particular case. 
On appeal 
to this Court, 
HELD : The High Court• was in error in setting 
aside 
the 
order 
E 
passed by the Government of Assam and in declaring that the offer to 
,settle the tea garden on payment df the amount specified Rs. 3,86,000 
T 
was not in conformity with rule 40. 
There was no warrant for the assumption made by the High Court 
that in settling the premium to be fixed in respect of its own property, 
the Government is bound to fix the premium generally in respect of a 
region. 
The Government is by the Act or the Rules not disqualified 
from fixing the premium to be paid in respect of an individual tea garden. 
In the absence of any indication to the contrary . a tea 
garden may 
appropriately be regarded as a locality within the meaning of Rule 40. 
The rate of premium may be fixed by the State Government accd!:ding 
to its commercial value. 
C1v1L APPELLATE JuR1so1cnoN: Civil Appeal No. 658 of 
1967. 
Appeal frnm the judgment and order dated June 27, 1966 of 
the Assam and Nagaland High C6urt in Civil Rule No. 296 of 
1964. 
Naimit Lal, for the appellants. 
Sarjoo Prasad and S. N. Prasad. for the respondent_ 
F 
G • 
H 
A 
B 
c 
D 
E 
F 
G 
ASSAM V. AGARWALA (Shah, C.J.) 
307 
The Judgment of the Court was delivered by 
Shah, C. J. On October 24, 1957 Rameshwar Agarwala-
hereinafter called 'the respondent' applied to the Deputy Com-
missioner, Lakhimpur, for settlement of a tea garden for "special 
cultivation of tea". By order dated March 11, 196~ the Govern-
ment of Assam permitted settlement of the tea garden for special 
tea cultivation on payment of Rs. 3,86,QOS/-
a~ premium. The 
respondent failed to pay the amount demanded. 
The State of 
Assam then put up the tea ,garden for auction. The respondent 
moved a petition in the High Court of Assam for an order declar-
ing tnat in fixing the amount of the premium at Rs. 3,86,008/-
the State acted illegally, and that the order was void and unen-
forceable at law because in fixing the ,amoun( of tile. premium the 
State acted without jurisdiction and the order directing auction 
of the tea garden for . not depositing the amount demanded was 
also illegal. The High Court upheld the contention and ordered 
the State of Assam-not to give effect to the order dated March 31, 
1964 c8lling upon the respondent to pay the amount due within 
two months of the order and the order dated November 26, 1964 
directing that the tea garden be put up for auction. With certi-
ficate granted by the High Court, the State of Assam has appealed 
to this Court. 
The tea garden belonged to the State of Assam. The Govern-
ment of Assam in the absence of 'any binding statutory provision, 
could settle the tea garden on such commercial terms it 
could reasonably obtain. The respondent applied to the Deputy 
Commissioner for settlement of the tea garden and requesting the 
State Govemm~nt for early fixation of the amount of premium. 
When the premmm was fixed by the Government the respondent 
protested, contending that the action of the State was illegal. 
Before the High Court it was contended by the Respondent that 
the power of the State Govern
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