JUDGMENT

(Delivered by Sadasivam, J.)

These civil revision petitions have been directed by the learned Chief Justice to be posted before this Diviston Bench as they involve two questions of law of some importance, namely, whether S. 3 of the Government Grants Act of 1895 (originally called the Crown Grants Act of 1895 prevails over the provisions of the Madras City Tenants Protection Act, 3 of 1922, and whether the State of Madras is bound by the provisions of the Madras City Tenants Protection Act, unless this is expressly stated to that effect in the Act.

These civil revision proceedings arise out of petitions filed by four timber merchants carrying on business in Basin Bridge Road, Madras for fixation of fair rent under S, 7 (a) of the Madras City Tenants Protection Act 1922. It is an undisputed fact that the lands on which the timber depots are kept belong to the State of Madras and (bey have been leased out by the Corporation to the several timber merchants. The Government allowed the Corporation to lease their lands in the Basin Bridge Road to timber merchants, subject to their approval, on the condition that 50 percent, of the rent realised should be paid over by the Corporation to the Government. The rents collected from the timber merchants were increased from litre to time, and finally, at the beginning of 1953, the timber merchants were informed that the lease would be renewed only on condition of their paying a rent of Rs. 50 per ground, though the Standing Committee of the Corporation itself had suggested only Rs. 35 per ground. Oosman Hajee and Co., and Messrs. S.N Vijayaraghavachariar succeeded in the courts below in invoking their jurisdiction for fixation of fair rent and the State has preferred C.R.P 1565 and 1799 of 1963. But in the other two revision petitions filed by M/s Sundarsanam Iyenger and Sons, the courts below took the opposite view that the provisions of the City Tenants Protection Act cannot be invoked for fixation of fair rent, in respect of the lands ownod by the Government.

It was urged on behalf of the State, in the courts below that the Corporation of Madras acted only as the agent of the Government in leasing the lands. In the appeals preferred by M/s Sudarsanam Iyengar and Sons to the City Civil Judge, Madras, there is a specific finding that ‘the position which the Corporation occupies is only that of an agent subject to the control of the Government with regard to the acceptance of the terms of the lease”. Even in the appeals preferred by the State of Madras against Oosman Hajee and Co and M/s Vijayaraghavachariar, the appellate court has found in the penultimate paragraph of its judgment that ‘all that the Government order provides is that the Corporation was entitled as the ‘agent of the State of Madras to lease the properties in question on terms approved by the Collector,” and it is in this view, the learned Principal City Civil Judge has considered the scope and effect of S. 3 of of the Government Grants Act. Thus the finding of the lower appellate court in all these cases that the Corporation acted as the agent of the Government in leasing the lands of the Government to the timber merchants is justified on the evidence on record and it correctly represents the final relationship between the parties.

The common law of England is that the king's prerogative is illustrated by the rule that the Sovereign is not necessarily bound by statute law which binds the subject. This is further reinforced by the rule that the king is not bound by a statute unless he is expressly named or unless he is bound by necessary implication or unless the statute being for the public good, it would be absurd to exclude the king from it. It was pointed out in Director of Rationing & Distribution v. Corporation of Calcutta A.I.R 1960 Cal. 1355. that this was the law applicable to India also until the advent of the Constitution. It has been held in the above decision that the rule of interpretation of statutes that the State is not bound by a statute, unless it is so provided in express terms, or by necessary implication, is still good law-This was relied on and followed in State Of West Bengalplaintiff; v. Union Of Indiadefendant A.I.R 1963 S.C 1241, State of Punjab v. O.G.B Syndicate Ltd. A.I.R 1964 S.C 669., & V.S.R & Oil Mills v. State of Andhra Pradesh A.I.R 1964 S.C 1781.. But in State of West Bengal v. Corporation of Calcutta A.I.R 1967 S.C 997, the above decision in Director of Rationing & Distribution v. Corporation of Calcutta, was overruled and the minority view or Wanchoo, J. in that decision was approved. It has been held in that decision that the rule of construction that the king is not bound by a statute unless he is expressly named or brought in by necessary implication, which was accepted by the Privy Council in interpreting statutes vis-a-vis the Crown is inconsistent with and incongruous in the present set up and that in the context of modern notions of the functions of a Welfare State, there it no sufficient reason to justify any distinction in the application of the rule of interpretation of statutes and that the general Act applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation. It is pointed out in that decision that the State can make an Act, if it chooses, providing for its exemption from its operation and that though the State is not expressly exempted from the operation of an Act, under certain circumstances, such an exemption may necessarily be implied. This decision was followed in the later Supreme Court decision in Union of India v. Jubbi A.I.R 1968 S.C 360 where it has been held that a statute applies to State as much as it does to a citizen unless it expressly or by necessary implication exempts the State from its operation.”

The Madras City Tenants Protection Act, as it originally stood, was applicable to the tenants in the City of Madras and there is a provision in the Act as amended by Madras Act XIX of 1955, to extend it to other Municipal Towns, and specified villages within five miles from the City of Madras, or municipal towns, by Government notification. In 1960, a proviso was added to S. 1(3) of the Act empowering the tenancies of lands owned by the Corporation of Madras in the City of Madras and certain other public bodies, such as the Municipal Council, Panchayat Union, District Board and Board of Trustees constituted under the Madras City Improvement Trusts Act. But there is no such exemption in the case of lands owned by the Government.

The decision of Ramakrishnao, J. in Murugesan v. Collector of Madras W.P No. 45 of 1961 throws some light on this aspect of the case. It related to proceedings taken by the Government under the Land Encroachment Act to evict dwellers of huts mainly occupied by employees in the Harbour in the locality called Kanniappa Nagar colony in pursuance of a scheme to provice for an alternative space for their occupation, as the Government land was required for the purpose of the Port Trust to extend the harbour. The hut dwellers of Kanniappa Nagar colony relied on the acts of the Corporation and the Government as showing that their occupation of the huts was authorised and claimed the benefit of the provisions contained in the City Tenants Protection Act. The fact that when the proviso to S. 1(3) of the Act was added in 1960 no attempt was made to give any similar protection to Government land was relied on to show that the City Tenants Protection Act could not be invoked in respect of Government lands. The learned Judge has observed that the reason for the amendment was to extend the benefit which the Crown enjoyed not only by virtue of the common law principle of saving Crown lands from the operation of the statute, but also by reason of the specific provisions of the Government Grants Act 1895, to the lands of the Corpotion and certain other authorities. It is true that in so far as this decision relies on Director of Rationing and Distribution v. Corporation of Calcutta, the authority has been shaken by the subsequent decisions referred to above. But, the interpretation of Ss. 2 and 3 of the Government Grants Act, 1895 given in thatcase supports the contention of the learned Government Pleader.

The decision in these petitions depends on a proper construction of S. 3 of the Government Grants Act, If the terms of the grant by the Government by way of leases of their lands through the Corporation are to take effect according to their tenor by virtue of S. 3 of the Government Grants Act, notwithstanding any law, statute, or enactment to the contrary, the City Tenants Protection Act cannot be invoked by the tenants for the fixation of fair rent. The preamble of the Government Grants Act gives an indication as to the scope and purview of the Act and it can be looked into to correctly understand the provisions of the Act. The Government Grants Act was passed not only to settle the doubts which bad arisen as to the effect of the Transfer of Property Act, 1882, but also to remove any doubts with regard to the power of the Government to impose limitations and restrictions upon grants and other transfers of lands made by it, or under its authority, S. 2 of the Government Grants Act deals with exemptions as regards the Crown Grants from the provisions of the Transfer of Property Act 1882 and thus it gives effect to the first object mentioned in the preamble. S. 3 of the Act provides that Crown Grants should take effect according to their tenor, notwithstanding any law to the contrary. There is no need for any such provisions if the law referred to in S. 3 is only the Transfer of Property Act. In Secretary of State fox India v. Raja Parthasarathi Appa Rao it is observed that “looking at the preamble and considering the purpose of the Act it cannot be doubted that the Act was rather declaratory in its nature than enabling or enacting”, that it had to be enacted so says the preamble, because doubts had arisen as to the extent and operation of the Transfer of Property Act, 1682, and that “taking the terms cf the Crown Grants Act, the inference seems to be irresistoble that prior to the Transfer of Property Act, there was no doubt whatever as to the power of the Crown to make a transfer of property in any terms, or under any of the conditions whatever”.

Haji Mohammad Nasurdin Khan Bahadur v. Ekambara Mudali relates to a case where the Crown made a grant of a village for the maintenance of a tomb. It was held in that decision that having regard to S. 3 of the Crown Grants Act, the validity of the grant could not be questioned on the ground that it created an estate not recognised by the Mohammadan law. In Kallingal Moosa Kutti v. Secretary of State a Bench of this court has held that under Ss, 2 and 3 of the Crown Grants Act, the Government has power to impose restrictions in a lease made by it a power which is not affected by the provisions of the Malabar Compensation for Tenants improvements Act. In Ullattuthodi Choyi v. Secretary Of State For India In Council the above decision has been followed and it has been held that “where under the terms of a lease granted by the Crown the lessee agrees to surrender the demised property on six months” notice, he cannot resist a suit in ejectment by the Crown after the requisite notice, on the ground that he must be paid the value of his improvements under the Malabar Compen sation for Tenants Improvements Act……“.

In Murugesa Gramani v. Province of Madras it has been held that the Crown Grants Act prevails over the City Tenants Protection Act and that being so, the terms of the grant of lease given by the Government to the appellant in that case have to be enforced.

There are decisions of other High Courts also with regard to the interpretation of S. 3 of the Government Grants Act to the same effect. In Gayaprasad v. Secretary of State it hag been held that in respect of a Crown grant the Crown is not bound by any of the sections of the Tenancy Act or the Transfer of Property Act or the Contract Act and that regard must be had by the courts to the terms of the grant. This decision throws light on the construction of S. 3 of the Crown Grants Act. The appellant in that case had purchased the property originally owned by the Government from the grantee and contrary to the terms of the grant made by the Government, he put up a construction after obtaining a licence from the municipality. It was urged that the Municipality acted as the agent of the Government and that the Government was bound by the Act of the Municipality and reliarce was placed on S. 188 of the Contract Act. It was held that the section of the Contract Act on which the appellant relied had no binding effect on the Government for the simple reason that it could cot override S. 3 of the Crown Grants Act. In State of Andhra Pradesh v. Abhisekam it has been held that the effect of S. 3 of the Government Grants Act is that when a grant has been made by the Government, it is, not, with reference to that grant, bound by any of the sections of either the Tenancy Act, or the Transfer of Property Act, or the Contract Act, or any other law for the lime being in force and it, therefore, follows that any grant made has to be construed in accordance with the tenor of the grant and the grant will certainly be regulated in accordance with such tenor.

We shall proceed to consider whether the decision of the Judicial Committee in Thakur Jagannath Baksh Sing v. United Provinces which has been referred to with approval in Collector of Bombay v. Nusserwanji has taken away the authority of the above decisions. The relevant passage in the decision of the Privy Council at page 34 is as follows:

“ Their Lordships ought to refer in passing to the Crown Grants Act 1895 of which S. 3 was relied on by the appellant. That section runs: ‘All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid (i.e, one made by the Crown) shall be valid and take effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding.”

“ These general words cannot be read in their apparent generality. The whole Act was intended to settle doubts which had arisen as to the effect of the Transfer of Property Act 1882 and must be read with reference to the general context and could not be construed to extend to the relations between a Sanad-holder and his tenants; still less could they be construed to limit the statutory competence of the Provincial Legislature under the Constitution Act.”

It is clear from the above passage that their Lordships of the Privy Council in passing referred to S. 3 of the Crown Grants Act. Their observations should be read in the light of the decision in that case. The appellant in that case put forward a claim that the U.P Tenancy Act 1939 is ultra vires of the Provincial Legislature. He claimed that the Act created rights and interest in land in favour of persons other than the grantee contrary to the Sanad granted to by the Crown in favour of bis predecessor-in-title and thus derogated from the terms of the Crown Grants because it modified or curtailed the rights conferred by the Crown. Thus the real question involved in that case was about the competence of the Legislature to enact laws which would affect a Crown Grant. In Subhan v. Union of India it has been held that S. 3 of the Crown GranU Act has no override ing effect on S. 3 of the West Bangal satte Acquisition Act and that a comptetent Legislature can legislate so as to vary the effect of a Crown grant and that S. 3 of the Crown Grants Act cannot limit the satutory competence of a State Legislature to legistate on a subject assigned to it by the Constitution. The principle is illustrated by the Zamindari Abolition Act and similar legislation.

The Privy Council referred to the first part of the preamble that it was intended to settle doubts which had arisen as to the effect of the Transfer of Property Act and stated that the general words of S. 3 could not be read in their apparent generality and mast be read with referrence to the general context and could not be construed to extend to the relation between a Sanad holder and his tenants. Thus as between the Government and the grantee, the terms of the grant would prevail notwithstanding any other law to the contrary. It is true, as pointed out in the said Privy Council decision, and the Calcutta decision just referred to that S. 3 of the Government Grants Act cannot be construed as to limit the statutory competence of the Provicial Legislature under the Constitution Act. Thus a Legislature can by express words, or by necessary implication, take away the effect of S. 3 of the Government Grants Act while enacting a particular legislation. But for S. 3 of the Government Grants Act the Madras City Tenants Protection Act would apply to tenancies in respect of Government lands. The express provision contained in S. 3 of the Government Grants Act, taken along withthe absence of any provisions in the Madras City Tenants Protection Act extending the Act to Government lands, either expressly or by necessary implication, can only lead to one inference namely, that the provisions of the Modras City Tenants Protection Act cannot be invoked contrary to the terms of the Government grants.

It is true in the decision in Collector of Bombay v. Nusserwanji the relevant passage of the Privy Council decision construing S. 3 has been quoted with approval. But we have already explained the scope of the decision in the Privy Council case. The respondent in the above Supreme Court case claimed immunity from assessment by virtue of a transfer made by the Government in favour of his predecess or in title. The lands were originally acquired by the Government for the purpose or the B.B.C.I railway under the provisions of the Land Acuisition Act and as they were no longer required for the purpose of the raiway, they were sold by the Gonvernor General to the predecessor;in-title of the respondent, The contention in that case was that as the grant is of a freehold estate without any reservation, it must, to take effect according to its tenor, be construed as granting exemption from assessment to revenue. It is held in that decision that S. 3 of the Crown Grants Act must be construed in the light of the preamble and so construed, it cannot have any bearing on the rights of the parties. It is further pointed out in that case that the section only enacts that “all provisions, restrictions, conditions and limitations over” in any great or transfer shall be valid and take effect according to their tenor and that what is relied on is not any “provision, restriction, condition or limitation over” in the relevant document Ex. A.1 which according to its tenor entitles the respondents to hold the lands rent free, but the absolute character of the interest conveyed under Ex. A. and therefore, S. 3 does not in terms apply. The deed in that case conveyed the lands to the purchasers absolutely ‘with all rights, casements and appurtenances whatsoever to be held for ever” as in the case of conveyance of land in fee simple. It dit not however recite that they are to be held revenuefree. Thus the observation of the Privy Council in Thakur Jagannath Baksh Sing v. United provinces, cited with with approval in the Supreme Court decision, cannot be taken as throwing any doubt on the correctness of the decision of this court; and the other courts as regards the scope of S. 3 of the Government Grants Act:

The terms of S. 3 of the Government Grants Act can certainly be relied on as specifically exempting Government Grants from the operation of Madras City Tenants Protection Act in the absence of any provision, either express or implied, extending the Act to Government grants. We are inclined to agree with the view of Ramakrishnan, J., in Murugesan v. Collector of Madras and others that in view of S. 3 of the Government Grants Act, the local legislature did not deem it necessary to include Government grants while amending the Act by introducing the proviso to S. 1 (3) of the Act giving exemption to lands of the Corporation and certain other public bodies.

The learned Government Pleader brought to our notice the unreported decision of Natesan. J, in Nallanna Gounder v. Muthuswami Gounder where a different view of S. 3 of the Government Grants Act was taken in deciding whether the state can claim immunity, and exception from the provisions of the Madras Cultivating Tenants Protectioa Act in respect of agricultural lands of the Government by virtue of S. 3 of the Government Grant Act. In the case before the learned Judge, a lessee of agricultural land from Government sought to rely upon the provision of the Madras Cultivating Tenants Protections Act sad the State met it by putting forward a claim to immunity and exemption from the provisions of that Act, by reason of the Government Grants Act. The learned Judge held, firstly, that the plaintiff in the suit would be a cultivating tenant within the meaning of the Madras Cultivating Tenants Protection Act and that if the Act should apply, he could not be evicted from his holding. The State was undoubtedly the landlord and but for the claim to immunity by reason of the Government Grants Act, S 3 of the Madras Cultivating Tenants Protection Act would afford protection to the tenant against eviction. The learned Judge examined the provisions of the Government Grants Act. He referred to the decisions already cited by us eariler in this judgment. He sited the observation time of the Privy Counsel in Thakur Jagannath Bakshi Singh v. United Provinces, that the words in S. 3 of the Government Grants Act ‘cannot be tead in their apparent generality and the observations Supreme Court in Collector of Bombay v. Nasserwanji. The learned Judge construed the observation that the general words in Sec. 3 cannot be read in their apparent generality to mean that the scope of Sec. 3 of that Act was limited. It seems to us that the observations both of the Pivy Council and the Supreme Court cannot be divorced from the context in which they were made. In the Privy Council decision, the validity of the United Provinces Tenancy Act, as enacted by the Proviocial Legislature was questioned in so far as it affected the rights conferred upon a grantee under a sannad. The Contention then was since under the terms of the grant it was open to the sannadholder to deal with the land and the tenancy as he liked, the impugned legislation, in so far as it interfered with his right to deal with his tenants in any way was contrary to the terms of the grant. The Judicial Committee pointed out that the legislative power could not be attacked and the statute regulating the relations between the landlord and the tenant, though it might affect diminish the rights which the landlord posse; sed earlier, did not in anv way run contrary to S. 3 of the Government Grants Act. By makin a grant of that description, the legislator did not deprive itself of any power to legislate within the scope of its authority, and the contention that by reason of the sannad, the pre-existing relations between the sannad holder and his tenants could not be interference with by legislation of this kind was replled and it is in that context that the Judiciation Committee observed that the words of S. 3 the Government-Grants Act should be re with reference to the context. Nor do t observations of the Supreme Court in the case referred to above lead to a difference conclusion. After quoting the passage from the Supreme Court decision, Natesan J. proceeding to say that “the Government Grants Act the being unavailable, the State ought to stand the archaic prerogative and immunity of Crown from the operation of the statute…… and proceeded to consider whether under general law the Crown was not bound by a statute, unless the statute expressly or by cl implications o bound it. We are unable to subcribe to the view taken by our learned brot that the Governments Grants Act become available’ solely by reason of the observation of the Privy Council and the Supreme Court We have already pointed out that under the ‘ as it stands at present, the State is bound by legislation, unless it is expressly or by nesssary impllication excluded from the opera of thatstatute. Undoubtedly, there is su piece legislation, that is, the Governr Grants Act, which does expressly exclude Government from the operation of statute; relation to certain matters covered by piece of legislation. In effect, the view Natesan, J. would appear to be that the decisions, that of the Privy Council and c Supreme Court have virtually destroyed basis of the Government Grants Act, and in so far as transactions dealt with by the are concerned, the Government by reast the provisions contained in that Act claim immunity from the operation of other statute. We are unable to agree in the taken by our learned brother that the decisions of this court Murugesa Grami Province of Madras,Ullathuthedi Secretary of State for India and Kallin Moossa Kutti v. Secretary of State for India may not be'goed law after the decisions as of the Judicial Committee and the supreme Court cited above. Neither expressly by necessary implication dees the Government Grans Act either stand repealed or has sn into obsolescent. We hold that it is n to the State to put forward successfully contention that the express stipulation ad in the terms of the grant, such as that leseee should surrender possession after the ry of the term of demise etc. can take effect, withstanding the provisions of the Madras ivating Tenants protection Act. It is also view that it is not necessary for the Madras Tenants Protection Act to contain provision excluding tike State from operation, for such an exclusion particular enactment may be found a different enactment catering the field. In so far as the Madraa city tnts Protection Act provides far the ol over the eviction of cultivating its, though the relevant Section excluding peration in the case of lands belonging to n specified bodies are concerned does expressly refer to the exclusion of lands ging to the State, the Government Grants Act confers that exclusion.

We therefore, find that Section 3 of the Govt. Grants Act prevails in the instant cases and the State is therefore, not bound by the provisions of the City Tenants Protection Act.

It should follow that the fair rent petitions filed by the respondents in C. R. P. 1565 and 1799 of 1963 and the petitioners in C.R.P 962 of 1965 and 1297 of 1966 in the City Civil Court are not maintainable against the landlord, the State.

They are accordingly dismissed, but in the circumstances, there will be no order as to costs.