A two-judge Bench of Justice S. Abdul Nazeer and Justice Krishna Murari, after noting several authorities has held that provisions of the Ceiling Act would be applicable in the case of the grantee of Government under a lease agreement.

The Court noted, "The grantee being lessee from the Government has no right to transfer the land without fulfilling the conditions stipulated in Clause 9 of lease deed. The terms of the lease deed though provide for sub-lease for agricultural purposes but sub-lessees can claim no independent rights as a tenure holder."

Senior Counsel Mr. S.R. Singh appeared for the Appellants while Counsel Mr. Tanmaya Agarwal appeared for the Respondents-State of Uttarakhand before the Court.

Appeals were filed against the judgment rendered by the Uttarakhand High Court via which the High Court had dismissed writs raising common questions filed by the Appellants. The Writ Petitions arose out of proceedings under the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960 [UP Ceiling Act].

The Secretary of State for India had executed a lease deed under the Government Grants Act, 1895 in favor of Lala Khushi Ram. Upon his death, the leasehold rights were inherited by Harikishan Lal as a successor. Harikishan Lal executed a registered sub-lease for agricultural purposes in favor of the Appellants.

The prescribed authority/Respondent no. 1 issued a notice under Section 10(2) of the UP-Ceiling Act to Harikishan proposing to declare the certain area of land held by him as surplus. Respondent no. 1 then inter alia declared the subject land to be surplus land in the hands of the Government lessee.

The Appellant made an application under Section 11(2) of the UP-Ceiling Act which was dismissed by Respondent No. 1 on the ground that he had no locus. This was challenged via a writ which was allowed and the matter was remanded to Respondent no. 1 to decide the objections of theAppellant under Section 11(2) of the UP-Ceiling Act.

After remand of the High Court, Respondent no. 1 again dismissed the application of the Appellant on the ground that possession is not reflected in the revenue record and conditions postulated in Clause 9 of the lease deed were not followed before creating a sub-lease in favor of the Appellant.

This was challenged before the ADJ which was dismissed. The doors of the High Court were knocked. During the pendency of the writ, the State of Uttaranchal came into existence and this writ was transferred to the Uttaranchal High Court.

It was dismissed for non-prosecution. An SLP was filed which was allowed and the writ was restored. The High Court, then, dismissed writs on merits. This order was challenged before the Apex Court in the instant case.

The Court culled out the following issues for its consideration:

(i) Whether the Appellants who are sub-lessees, by implication acquire the status of tenure holder in view of the definitions of 'holding' contained in Section 3(9) of the Ceiling Act and the 'tenure holder' in Section 3(17) of the Act.

(ii) Whether the Appellants being sub-lessee of the original Government Lessee are merely ostensible tenure holders of the land, while the Government lessees continued to be the original holders i.e., the land in question is merely held by the Appellants on behalf of the original lessees.

The Court noted that the very purpose behind enacting the UP-Ceiling Act is to prescribe a ceiling limit on the area of land held by a tenure holder for the purposes of securing the interest of the community at large to ensure increased agricultural production and to provide land for landless agricultural labourers with a view to having an equitable distribution of land.

The Appellants contended before the Court that since they are the holder of the holding, by implication they become tenure holders as per the combined reading of Section 3(9) and 3(17) of the UP-Ceiling Act.

Upon analyzing the terms and conditions of the grant, the Court noted as follows.

"An analysis of the terms and conditions of grant makes it clear that any transfer of land by the Government Lessee was subject to fulfilment of the conditions of the government lease and sub-lease and non-compliance of the conditions and transfer made without fulfilling the conditions would be void. Though, the conditions of grant allowed sub-lease of the land in the ordinary course of agriculture but contrary to the terms of grant, the sub-lessee can claim no independent tenancy right so as to frustrate the terms and tenure of the grant, as the sub-lease executed for ordinary course of agriculture cannot be treated as transfer for want of compliance of the conditions enumerated in the Clause itself. Thus, the appellants in their capacity as sub-lessee shall not acquire the status of an independent tenure holder."

The Court noted that terms and conditions of the grant would have an overriding effect in view of the amendment of Section 2 & 3 of the Government Grants Act to the State of UP.

The Court noted that the Appellant continued to be an ostensible holder and the government grantee was the read alone. The Court upheld the decision of the High Court. The appeals were, accordingly, dismissed.

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