Deepak Gupta, J.@mdashBy means of this petition the Petitioner prays that annexures P-9, P-10 and P-11 i.e. the orders passed by Respondents No. 2 to 4 dated 21.11.1995, 24.6.1996 and 12.08.2002 be quashed and set-aside.
2. Briefly stated the facts of the case are that on 8.7.1994 the Assistant Collector 1st Grade, Shimla (Rural) made a report to the District Collector, Shimla that the Petitioner Shri Ashok Madan had acquired 0-14 biswas of land comprised in Khasra No. 2429/2148/302 situated in Mauja Patti Rehana, Tehsil & District Shimla from Petitioner No. 2 Tara Chand in violation of the provisions of Section 118 of the H.P. Tenancy and Land Reforms Act, 1972 (hereinafter referred to as the Act).
3. The allegations, in brief, are that on 9.6.1992 Ashok Madan, who is stated to be the contractor, entered into a collaboration agreement dated 29.6.1992 and thereafter entered into a partnership deed dated 1.4.1992 whereby he was to develop the property of Tara Chand. Later some portion of the property was purchased by Ashok Madan himself who constructed a eight storied building. According to the State the entire collaboration agreement, partnership deed were a farce and created only with a view to get subvert the provisions of Section 118 of the Act under which a non-agriculturist can not acquire property in Himachal Pradesh.
4. Admittedly, Shri Ashok Madan is not an agriculturist. The District Collector after hearing the matter held that Ashok Madan had acquired the property in violation of the provisions of Section 118(1) of the Act and therefore ordered that the said property would vest in the State of Himachal Pradesh free from all encumbrances. This order was passed on 21.11.1995. Thereafter, Shri Ashok Madan and Tara Chand both filed an appeal before the Commissioner, Shimla Division, Shimla which was rejected. Thereafter, revision petition was filed before the Financial Commissioner, H.P. Shimla, which has also been rejected. Hence, the present petition.
5. I have heard Shri G.C. Gupta, learned senior counsel for the Petitioners and Shri Vivek Singh Thakur, learned Additional Advocate General on behalf of the State.
6. Shri G.C. Gupta, learned senior counsel for the Petitioners contends that Tara Chand was and continued to be the owner of the land and he had entered into a collaboration agreement with M/s A.K. Madan Enterprises for development of land. The collaboration agreement has been attached as annexure P-1. It shows that the land in question was purchased by Shri Tara Chand from the original owner Shri Dewan Chand on 29.5.1990. M/s A.K. Madan Enterprises, a partnership firm, acting through Ashok Madan was the second party to this collaboration agreement. The second party, known as the developer, was to get prepared the plans for the building and the money for raising the building was also to be paid by the second party. As per the collaboration agreement on the flats being sold the second party was to receive 80% of the sale consideration of the flat and 20% net profit was to be paid to the first party. The net profit would be arrived at after taking into consideration all expenses incurred for raising the building on the project. Under Clause 7 of this agreement the ownership in respect of the land was to remain with the first party. Pursuant to the collaboration agreement Tara Chand executed a power of attorney in favour of Shri Ashok Madan permitting him to sell, transfer and convey all or any part of his land and to enter into an agreement for sale before the registrar in respect of the flats or the land which was the subject matter of the collaboration agreement. This power of attorney virtually empowers Shri Ashok Madan to deal with this property in any manner.
7. On 9th December, 1993 Tara Chand acting through Ashok Madan sold the slab on the 3rd floor having covered area of 347.75 sq. mtrs. to Smt. Namrita Madan wife of Shri Ashok Madan for a total consideration of Rs. 1,75,000/-. The entire consideration is stated to have been paid to M/s A.K. Madan Enterprises i.e. the developer. Vide another sale deed dated 21st December, 1993 Tara Chand sold the 4th floor to Shri Ashok Madan for a sum of Rs. 1,40,000/- and this amount was stated to have been paid to M/s A.K. Madan Enterprises. There after, the Tehsildar issued a notice to Shri Ashok Madan and in reply to notice Shri Ashok Madan stated that he had purchased only built-up area and had not purchased any land. There after, action was taken as detailed here in after.
8. Shri G.C. Gupta, learned Senior Advocate appearing on behalf of the Petitioners submits that Section 118 of the Act, as it stood at the relevant time, did not in any manner debar the execution of a power of attorney or collaboration agreement.
9. Shri Gupta, relies upon the judgement of this Court in Nirmal Singh v. Randhir Sharma 1994 (2) Sim.L.C. 255 wherein it was held that the bar u/s 118 is not applicable to the constructed area, which is not subservient to the agriculture. He also relies upon the judgement of a learned Single Judge of the Court in Smt. Santosh Malhotra v. State of H.P. and Anr. Latest HLJ 2003 (HP) 1226 where in the learned Single Judge held as follows:
14. The revenue authorities below have misdirected themselves applying the above extracted provisions of Section 118 of the Act in the present case. Suresh Kumar Shukla has not transferred his ownership rights and interest in the property in favour of Smt. Santosh Malhotra by way of General Power of Attorney (Annexure P-1) and the transfer by way of execution of the General Power of Attorney is not incorporated in Section 118(1) of the Act. The transfer of land to non-agriculturist is only barred u/s 118(1) if the transfer is by way of sale, gift, exchange, lease, mortgage with possession or creation of tenancy including sales in execution of a decree of a Civil Court or for recovery of arrears of land revenue. The General Power of Attorney has been executed on 7.11.1991 by Suresh Kumar Shukla the owner of the property in favour of Smt. Santosh Malhotra in which she has only been authorized to look after, manage, sell or construct the building on the piece of land, to enter into agreement, to sell to receive the earnest money, to execute or sign on the sale deed etc. etc. On bare reading of the General Power of Attorney it cannot be concluded that Suresh Kumar Shukla has transferred the land by way of sale, gift, etc. etc. envisaged in Section 118(1) of the Act in favour of Smt. Santosh Malhotra or in favour of Jai Dev Malhotra nor it is proved on record that Smt. Santosh Kumar Malhotra has sold the land to her son Jai Dev Malhotra on the strength of the General Power of Attorney. The reasoning of the Collector that as Jai Dev Malhotra had spent a sum of Rs. 1,90,000/- on the construction of the building on the land as reflected by him in his income tax returns will not be a sufficient proof that Suresh Kumar Shukla has transferred the land to Jai Dev Malhotra on the basis of the General Power of Attorney executed in favour of his mother. The H.P. Tenancy and Land Reforms (Amendment) Act 1994 came into force on 22.3.1995 whereas the General power of attorney (Annexure P-1) has been executed on 7.11.1991 as noticed above and the Collector passed the order (Annexure P-2) on 20.2.1995 prior to the date of the enforcement of the amended Act. Explanation of Section 118(1) of the Amendment Act reads as under:
Explanation: For the purpose of this Sub-section, the expression "transfer of land" shall include:
(a) a benami transaction in which land is transferred to an agriculturist for a consideration paid or provided by a non-agriculturist; and
(b) an authorisation made by the owner by way of special or general power of attorney or by an agreement with the intention to put a non-agriculturist in possession of the land and allow him to deal with the land in the like manner as if he is a real owner of that land.
10. Relying upon the aforesaid judgements Shri Gupta contends that the authorities below have gravely erred in holding that the intention of the parties was to subvert the law.
11. On the other hand, Shri Vivek Thakur, Additional Advocate General submits that the Court must read the documents as a whole and must not read the documents literally. He submits that the intention of the party must be gathered by a combined reading of all the documents. He relies upon the following observations approved by the Apex Court in Moti Ram v. State of M.P. (1998) 4 SCC 47
there is no surer way to misread any document than to read it literally....
12. Shri Vivek Thakur, also relies upon the following observations of the Apex Court in
It is now a well settled principle of law that a document must be construed having regard to the terms and conditions as well as the nature thereof.
13. In
27. When the insurer obtains an instrument from the assured on settlement of the claim, whether it will be a deed of subrogation, or subrogation-cum-assignment, would depend upon the intention of parties as evidenced by the wording of the document. The title or caption of the document, by itself, may not be conclusive. It is possible that the document may be styled as `subrogation'' but may contain in addition an assignment in regard to the balance of the claim, in which event it will be a deed of subrogation-cum-assignment. It may be a pure and simple subrogation but may inadvertently or by way of excessive caution use words more appropriate to an assignment. If the terms clearly show that the intention was to have only a subrogation, use of the words "assign, transfer and abandon in favour of" would in the context be construed as referring to subrogation and nothing more.
xxx...xxx...xxx...xxx...
39. In this context, it is necessary to remember that the nature of examination of a document may differ with reference to the context in which it is examined. If a document is examined to find out whether adequate stamp duty has been paid under the Stamp Act, it will not be necessary to examine whether it is validly executed or whether it is fraudulent or forged. On the other hand, if a document is being examined in a criminal case in the context of whether an offence of forgery has been committed, the question for examination will be whether it is forged or fraudulent, and the issue of stamp duty or registration will be irrelevant. But if the document is sought to be produced and relied upon in a civil suit, in addition to the question whether it is genuine, or forged, the question whether it is compulsorily registrable or not, and the question whether it bears the proper stamp duty, will become relevant. If the document is examined in the context of a dispute between the parties to the document, the nature of examination will be to find out that rights and obligation of one party vis-a`-vis the other party.
14. The law is, therefore, clear that merely the nomenclature or the title of the document will not determine what are the rights created by the document. The intention of the parties must be gathered on a combined reading of all the documents and the behaviour of the parties in the manner in which they treated the document. Section 118 was introduced with a view to restrict the transfer of land in favour of non-agriculturist except to specified persons as contained in the section itself. The purpose behind it was that the economically advantageous class does not take undue advantage of the small agriculturists by purchasing their small holdings. The provision was introduced as rich persons who were not agriculturists were purchasing agricultural land in Himachal Pradesh at high price exploiting the local Himachali people. However, the section itself provided that in special cases permission can be granted for transfer of land to non agriculturist. The constitutional validity of this section was upheld in Smt. Sudarshana Devi v. Union of India and another ILR 1978 HP 355.
15. In Society for Preservation of Kasauli and its Environs v. State of Himachal Pradesh and Ors. 1994 (Supp.) Sim.L.C. 450 a Division Bench of this Court held as follows:
122. The reason for placing restrictions on the transfer of land in favour of non-agriculturists in the Act was to avoid concentration of wealth in the hands of non-agriculturists moneyed class. Agricultural land in Himachal Pradesh is very limited in view of the mountainous terrain and in case it is allowed to pass indiscriminately into the hands of this class by sheer strength of money power, utilizing the same through remote control by use of black money in agriculture sector and avoid payment of tax, the small land holdings of the poor people of the State would vanish and the object of the land reforms legislation becoming totally inconsequential and purposeless. In order to check this problem, particularly in rural areas, the transfer of land in favour of non-agriculturists was, therefore, prohibited. Exception has been created in favour of certain classes described in Sub-section (2) of Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972.
16. Section 118(1) as it stood at the relevant time read as follows:
Notwithstanding anything to the contrary contained in any law, contract agreement, custom or usage for the time being in force, but save as otherwise provided in the Chapter, on transfer of land (including sales in execution of a civil court or for recovery of arrears of land revenue), by way of sale, gift, exchange, lease, mortgage with possession or creation of a tenancy shall be valid in favour of a person who is not an agriculturist.
17. Section 118(1) has been amended from time to time and now read as follows:
118. Transfer of land to non agriculturists barred -
(1) Notwithstanding anything to the contrary contained in any law, contract, agreement, custom or usage for the time being in force, but save as otherwise provided in the Chapter, on transfer of land (including transfer by a decree of a civil Court or for recovery of arrears of land revenue), by way of sale, gift, Will, exchange, lease, mortgage with possession, creation of a tenancy or in any other manner shall be valid in favour of a person who is not an agriculturist.
Explanation. For the purpose of this Sub-section, the expression "transfer of land" shall not include.
(i) transfer by way of inheritance;
(ii) transfer by way of gift made or will executed, in favour of any or all legal heirs of the donor or the testator as the case may be.
(iii) transfer by way of lease of land or building in a municipal area but shall not include.
(a) a benami transaction in which land is transferred to an agriculturist for a consideration paid or provided by a non-agriculturist; and
(b) an authorisation made by the owner by way of special or general power of attorney or by an agreement with the intention to put a non-agriculturist in possession of the land and allow him to deal with the land in the like manner as if he is a real owner of that land.
18. The contention of Shri G.C. Gupta, learned senior counsel is that the amendments made later bar transfer by way of power of attorney or benami transactions which are not retrospective and will not affect earlier documents in this behalf.
19. On the other hand Shri Vivek Thakur, Additional A.G. submits that the intention of the unamended Act was to prohibit the transfer of land and if any transferable right in the land was created the same was prohibited. I am of the considered view that the intention of the law makers was to ensure that the land is not transferred to non agriculturist. Every citizen has a right to do lawful act and if he can lawfully avoid the rigors of law he is entitled to do so. However, he cannot subvert or violate the law under the garb of nomenclature of documents. Section 118 prohibits the transfer of land whether by way of sale, lease, mortgage, etc. Importantly, Section 118 as it originally stood even debarred the creation of a tenancy in favour of a person who is not an agriculturist. Therefore, the intention of the legislature was clear that if any right in the land is transferred the same would be hit by the provisions of Section 118. Since, sale, mortgage, etc. were specifically prohibited some persons tried to develop novel methods of circumventing law. In the present case, power of attorney, collaboration agreement and partnership deed were entered into. What is the effect of these documents? As per the collaboration agreement the entire funds of the construction were to be raised by M/s A.K. Madan Enterprises or Shri Ashok Madan and not by the land owner. It is M/s A.K. Madan Enterprises who was to decide what sort of construction was to be raised and the owner Tara Chand had neither any say in the matter nor could even object to the manner of construction. Tara Chand was even debarred from changing the ownership of the land and he was required to execute power of attorney in favour of Ashok Madan to enable him to enter into a sale agreement with prospective buyers.
20. The General Power of attorney executed in favour of Ashok Madan entitles him to raise any construction and sell the same to any person by executing a sale deed. As per the partnership deed Tara Chand was not required to contribute any funds and it is implied that his contribution to the partners is the value of the land. All the parties below on the interpretation of the documents have come to the conclusion that except for formally transferring the ownership, Ashok Madan for all intents and purposes had become the owner of the property. Tara Chand was left with no right in the property and could not even deal with it. Ashok Madan purchased the 4th Floor slap and his wife Smt. Namrita Madan, who also happens to be a partner in the partnership firm, purchased the 3rd floor slab.
21. The contention of Shri Gupta that land was not transferred cannot be accepted. It may be true that de jure there was no transfer of land but de facto the entire land was transferred to Shri Ashok Madan. The other attending circumstance is that the entire capital investment was made by the partners other than Tara Chand. 20% of the net profit was to go to Tara Chand but the record reveals that nothing was paid to him. It is obvious that all the documents were just a cover up operation and Petitioner tried to create a smoke screen over the sale of land.
22. Furthermore, under Article 227 of the Constitution of India, this Court can only correct the errors of jurisdiction and not errors of fact. The view taken by the authorities is plausible and reasonable. It cannot be said to be a perverse view and as held by the authorities below the conduct of the Petitioners and the material on record clearly shows that the transaction was a benami transaction though given the colour of a collaboration agreement. This finding cannot be interfered with in the present proceedings and therefore, I find no merit in the petition, which is accordingly dismissed. No costs.
