Govt. Of Bombay v. Ahmedabad Sarangpur Mills Co.

Beaumont, C.J:— These are two appeals by the Government of the Province of Bombay against orders made by the First Class Subordinate Judge of Ahmedabad. Appeal No. 188 of 1940 is the only one in which there is any substance, and that arises in this manner. On 26th June, 1917, and was granted by the Collector of Ahmedabad purporting to act on behalf of the Secretary of State for India, by which liberty was granted to the plaintiff to construct buildings in Survey Nos. 29, 30 and 31 on the conditions stated in the sand, and the annual assessment was to be Rs. 510 for fifty years from 1st August 1915, and there was a clause enabling the assessment to be revised within certain limits. In 1921 the plaintiff wanted to make certain modifications in his buildings, and a fresh sanad was granted on 27th July, 1922. That sanad was not granted in the form of an agreement like the agreement of 1917, but it was executed by the Collector of Ahmedabad on behalf of the Secretary of State for India in Council and by the plaintiff. It was, therefore, in fact an agreement, though not expressed to be inter partes. The effect of that agreement was to alter the assessment to Rs. 515, the period was to be fifty years from 1st August 1921, and there were various provisions as to the buildings which might be erected. It was provided in the schedule dealing with the building conditions: “The previous agreement is canceled.” In 1935 the Collector of Ahmedabad thought that there had been serious breaches of the conditions of the sanad of July 1922, and on 16th September, 1935, he made an order canceling the sanad, and largely, increasing the assessment. From that order an appeal was taken to the Commissioner, Northern Division. By the time the appeal came to be heard it had been discovered that the Collector's order had been based on a mistake of fact. It had been supposed by the Collector that the plaintiff had built upon a much wide area than it was entitled to build upon and that was the basis of his order, but it was subsequently discovered that contention was not well founded and accordingly the Commissioner set aside the Collector's order in appeal, but he then proceeded to pas a further order in revision under S. 211, Bombay ??? Revenue Code. By that order he canceled the Collector's order of 4th January, 1922, and ordered that will effect from 1921–1922 the non-agricultural assessment should be levied at the full standard rate of Rs. 20 per acre for a period guaranteed for fifty years, as that a fresh sanad in form M should be executed will effect from that year. This suit was filed by the plaintiff for a declaration that the order of the Commission of 24th November, 1936, so far as it canceled the Collector's order of 4th January, 1922, is ultra vires.

2. Now, the Collector's order of 4th January, 1922, which the Commissioner purported to cancel, is a ??? made by the Collector of Ahmedabad, are served upon the plaintiff informing it that the plans had submitted were sanctioned and stating what assessment the plaintiff was to pay. No doubt, that order was the foundation on which the agreement of 27th July, 1922, was founded. But the Commissioner did not purport to set aside that agreement he merely set ??? the order of the Collector on which the agreement ??? founded, which he could, no doubt, do under S. 21 Bombay Land Revenue Code. Under that section he a in revision call for the papers in order to satisfy ??? as to the legality or propriety of any decision or ord passed by, and as to the regularity of the proceeding of a subordinate revenue officer. But there is ??? in that section to suggest that the Commissioner ??? cancel an agreement made by the Collector, not as subordinate officer of the Commissioner, but as age for the Secretary of State, and entered into by the Collector in that; capacity with third parties. Mere setting aside the Collector's order of 4th January 192 would not affect the agreement founded upon that order. In the lower Court the trial Judge considered that ??? Commissioner's order did cancel the agreement of 27 July 1922. The learned Judge does not seem to has noticed that the order does not purport to cancel the agreement it only cancels the Collector's order of 4 January, 1922. But the learned Judge held that, ??? the agreement of 27th July, 1922, was canceled, must be treated as having been canceled as being ??? vires the Collector, and, therefore, a nullity; and held that if that agreement was a nullity the ??? in it that the earlier agreement of 1917 should be can celled was also a nullity. He therefore held that ??? earlier agreement was operative. I prefer to based decision on the view that the Commissioner did not set aside, or purport to set aside, the agreement 27th July, 1922; nor do I think that he had power set it aside.

3. A similar point was decided by a Division Bench this Court in L.P.A No. 40 of 1938.1 All those ??? learned Judges seem to have taken the view that ??? Commissioner acting under S. 211 could not ??? an agreement entered into by the Collector as age for the Secretary of State. That view has also ??? adopted by Divatia, J. in 44 Bom. L.R 4052. In ??? opinion, the view is the right view. The Commission here had no power to modify the agreement of 27 July, 1922. That being so, that agreement stands, ??? necessarily as long as it stands, the agreement of 26 June, 1917, is canceled. The appeal of Government (No. 188 of 1940) therefore fails. The other ??? (No. 319 of 1941) is not pressed.

4. It was ??? filed on technical grounds. What the learned Judge did in that case was to direct Government to ??? ??? the Plaintiff sums paid by the plaintiff under protest ??? the Collector's order of 16th September, 1935, which as admittedly founded on a mistake of fact and which ??? commissioner set aside. There is therefore no ??? that the plaintiff was entitled to recover that ??? Both the appeals will be dismissed with costs ??? modify the order of the lower court which held. Appeal No. 188 of 1940 the agreement of 26th June, 1917, revived, and make a declaration that the ??? of 27th July, 1922, was not validly canceled by ??? commissioner, and is still subsisting. The order ??? the payment of Rs. 4900 odd stands.

5. Rajadhyaksha, J.:— I agree.