STATE OF U.P versus ZAHOOR AHMAD & ANR

Citation: [1974] 1 S.C.R. 344 · Decided: 08-08-1973 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

344 
STATE OF P \>. 
'· l'. 
ZAHOOR AHMAD & ANR. 
August 8, 1973 
(A. N. RAY, C. J. AND D. G. PALEKAR, J.] 
Transfer of Property Act, 1882, s. 116, and Government Grants ti.ct, 1895 
B 
Ss. 2 & 3-Lease of reserved forest' in U.P. whether not governed by s. 116 
T.P. Act because of provisions of Government Grants Act. 
' 
The appellant State was the proprietor of a reserved forest. 
Th: respond-
ent took on lease from the appellant a plot of land for industrial purposes in 
the said forest area. As found , by the High Court th~ lease was orig1oally 
granted for one year in 1947 at an annual r~nt of Rs. 100. It was renewed in 
1948 and 1949 for one year. After tbe termination of the lease in March 1949 
C 
the respondent continued to be in possession of the land and agreed to abide 
by the terms to be fixed by the appellant. 
Under the terms fixed by the 
appellan! the respondent was required to pay Rs. IOJO as annual rent for the 
ttccupation of the land till July 15, 1950. The respondent r ... mained in pos· 
session of the leased property after the determination of the lease in 1950, for 
a further period of three years. 1he appellant want d to enhanee the r.nt to 
which the respondent did not agree. In the constquent suit fil~d by the appel· 
lant the trial court passed a decree in the suit all'Jw1ng Rs. 6000 as rent f r the 
D 
years 1950-51 and 1951-52 and Rs. 5000 as damages for 1952-53. 
The High 
Court reversed the decree. 
It held that n'J notice as required und::r s. 106 of 
the Transfer of Property Act had b en given and since on the facts the respon .. 
dent must be: deemed to have held over within the m.aning of s. 116 of the 
Transfer of Property Act, the rent was payable as und:r the previous lease, 
On this view it passed a decree in favour of the appellant for Rs. 300u being 
rent at Rs. 1000 per year for the th_ee y.'ars in questi'Jn, In appeal by special 
leave to this Court the appellant State contended that s. 116 of the Transfer of 
Property Act was not applicable to the case b~~ause of s. 2 of the Government 
E 
Grants Act. 
Dismissing the appeal, 
HELD : l'he lease in the present case was for the purpose of erecting a 
temporary rice mill and for no oth ?l' purpos~. The mere fact that the State 
is the lessor will not by itself tnakc it a Governm nt grant wi:hin the meaning 
of the Government Grants Act. 
There was no evidence in the pr'sent case in 
the character of the land or in the making of the lease or in ihe content of 
F 
the· l~ase to support the plea on b ·half of the State that it was a grant within 
the meaning of the Government Gran!s Act. [347E-G] 
In the present case the High Court correctly found on the facts that the 
respondent after the det'.'rmination of the lease held over. 
Even if the Gov-
ernment Grants Act applied section 116 of the Transfer of Property Act was 
not rcnc'c-red inap1 icablc. 
The effect of s~ction 2 of the Government Grants 
Act is that in the construct1on of an instrument governed by the Government 
G 
Grants Act the court shall construe sych grant irrespective of th-. provisions 
of the Transfer qf Property Act. It does not me.an that all the provisions of 
the Transfer of Property .\er are Inapplicable. To illustratP, in the ca<i 0 of a 
grant und·3'r the Government Grants Act section 14 of the Transfer of Property 
Act will not apply because section 14 which provides what .is known as the 
rule against perpetuity will not apply by reason of the prOvisions in th~ Govern-
ment Grants Act. The a:rant shall be construed to take effect as if the Trans~ 
fer of Property Act does not apply. [3488-DJ 
Section 3 of the Government Grants Act declares the unfettered discretion 
H 
of the Government ,to impose such conditions and limitations as it thinks fit, 
no matter what the general law of the land be. 
Th-. meaning of sections 2 
and 3 of the Government Grants is that the scope of that Act is not limited to 
U. p. STATE v. ZAf{OOR AHMAD (Ray, C.J.) 
345 
~ 
atrecti~g the provisions of tl:e Transfer of Pro~!1JI Act ~DIY: The Govem~'Jll 
has unfettered discretion to imppse any cond1ttons, hm1tations. or restnChOIJS 
in its grants, and the right,' principles and obligations of '!Ie- grantee '!~uld 
be regulated according to- the terms of the grant, notwithstanding any prov1s1om 
of any statutory or common law. [348D-F] 
Jnanendra Nnth Nanda v. Jadu Nath Baner;e, J.L.R. [1938] I Cal. 
62~. 
and Secretary of State for India. in Council v. Lal Mohan Chaudhuri, I 

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