THE STATE OF KARNATAKA AND ORS. versus SHANKARA TEXTILES MILLS LTD.

Citation: [1994] SUPP. 4 S.C.R. 432 · Decided: 18-10-1994 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
THE STATE OF KARNATAKA AND ORS. 
v. 
SHANKARA TEXTILES MILLS LTD. 
OCTOBER 18, 1994 
B 
[P.B. SAWANT AND S.C. AGRAWAL, JJ.] 
Land Reforms : 
Kamataka Land Reforms Act, 1961/Kamataka Land Revenue Act-
C Sections 2( 18), 79-lJ-81(b )(ii)/95(2)--<:ompany holding lands-Part of 
lands converted as non-agricultural land-The other part continued to be 
considered non-agricultural--Company filing declaration and claiming ex-
emption-No permission taken under S.95(2) of the Revenue Act for conver-
sion of land us~ere use for non-agricultural purposes does not convert the 
agricultural land into non-agricultural land-S. 79-B of the Reforms Act-lr-
D respective of the date of notification the date of vesting of land in Govern-
ment, would be date on which the provisions came into force. 
E 
F 
The Respondent Company had certain lands. A part of the land on 
which the Company had its factory was converted into non-agricnltural 
land under Section 95(2) of the Karnataka Land Revenue Act, and the 
remaining land was not converted and continued to be considered as 
agricultural land. Ont of these lands, the Improvement Board acquired 
and took possession to the extent of 28 acres and 14 gunthas, under the 
provisions of Karnataka Improvement Board Act, 1976. 
Since there was delay in passing the award, the Respondent-Com-
pany approached the High Court by way of a Writ Petition. The High Court 
directed the Land Acquisition Officer to pass the award. The Improvement 
Board filed an appeal, but it was dismissed. Thereafter the Land Acquisi-
tion Officer made his award and referred it to the Divisional Commis-
G sioner for approval since the award exceeded Rs.1 lakb. As the approval 
was not forthcoming, the Respondent Company filed a"other Writ Petition 
and the High Court directed the Divisional Commissioner to dispose of 
the proceedings within two months. Despite the directions, the Divisional 
Commissioner did not pass an order. 
H 
In the meantime the Respondent-Company filed a declatation under 
432 
STATE v. SHANKARA TEXTILES LID. 
433 
Section 79·B(2)(a) of the Karnataka Land Reforms Act, 1961 claiming the A 
entire disputed land as agricultural land. It also claimed exemption from 
Section 79· B ou the ground that the disputed land was mortgaged to State 
Financial Corporation. The Special Deputy Commissioner granted the ex-
emption. The appeal preferred by the State was allowed by the Tribunal. 
Against this order, the Respondent-Company filed a Writ Petition which B 
was allowed by the High Court. 
In the present appeal by the State, two questions were raised viz. (i) 
Whether the land could be deemed to have been permitted to be converted 
for non·agriculatural use merely because it was used for non-agricnltural 
purposes although no permission under Section 95(2) of the Revenue Act C 
was taken; and (ii) Whether under S.79-B of the Act, the land vests in the 
State Gvoernment from the date of the notification or from the date of 
coming into force of the Act. 
Allowing the appeal, this Court 
HELD : 1. The object of the Act, viz., the Karnataka Land Reforms 
Act which came into force on 2nd October, 1965 is, among other things, to 
confer ownership on tenants, to place ceiling on land holdings and to 
distribute the surplus land among the members of the Scheduled Castes 
D 
and Scheduled Tribes, dispossessed tenants unregistered as occupants, 
displaced tenants having no land, landless agricultural labourers, landless E 
persons whose gross annual income does not exceed the prescribed limit. 
[440·B·CJ 
2. The High Court has proceeded on the basis that there is no specific 
finding regarding the nature and usage of the land as agricultural and 
hence, the Special Deputy Commissinor could not treat it to be an agricul· F 
tural land merely on account of the fact that permission for conversion of 
the land under Section 95(2) of the Revenue Act was sought (but admittedly 
not given). Secondly, it has proceeded on the footing that the land in 
question does not satisfy any of the characteristics as required under the 
definition 'land' in Section 2(18) of the Act, i.e., Karnataka Land Reforms G 
Act (the Act) investing the authorities with the jurisdiction to take proceed· 
ings under Section 79-B of the Act. The High Court had misread the facts 
on record. The consistent stand taken by the authorities is that the land 
was never converted for non-agricultural use as required by the provisions 
of Section 95(2) of the R

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