Shah, C. J. - (1.) On October 24, 1957 Rameshwar Agarwala - herein after called 'the respondent' applied to the Deputy Commissioner, Lakhimpur, for settlement of a tea garden for "special cultivation of tea" By order dated March 11, l964 the Government of Assam permitted settlement of the tea garden for special tea cultivation on payment of Rs. 3,86,00 as premium. The respondent failed to pay the amount demanded. The State of Assam then put up the tea garden, for auction. The respondent moved a petition in the High Court of Assam for an order declaring that in fixing the amount of the premium at Rs. 3,86,008/- the State acted illegally and that the order was void and unenforceable at law because in fixing the amount of the premium the State acted without jurisdiction and the order directing auction of the tea garden for not depositing the amount demanded was also illegal. The High Court upheld the contention and ordered the State of Assam not to give effect to the order dated March 31, 1964 calling upon the respondent to pay the amount due within two months of the order and the order dated November 26, 1964 directing that the tea garden be put up for auction. With certificate granted by the High Court, the State of Assam has appealed to this Court.
(2.) The tea garden belonged to the State of Assam. The Government of Assam in the absence of any binding statutory provision, could settle the tea garden on such commercial terms it could reasonably obtain. The respondent applied to the Deputy Commissioner for settlement of the tea garden and requesting the State Government for early fixation of the amount of premium. When the premium was fixed by the Government the respondent protested, contending that the action of the State was illegal. Before the High Court it was contended by the respondent that the power of the State Government to fix the premium for which it could lease the tea garden was restricted by Rule 40 framed under the Assam Land Revenue Regulations. The Rule reads: "In addition to the land-revenue payable under Rule 17 and value of the timber assessed under Rule 37, an applicant to whom a lease for special cultivation is granted shall be liable to pay premium. The rate of premium shall be fixed by the State Government from time to time for each locality . ********** "
(3.) The reasons which persuaded the High Court to uphold the plea raised by the respondent may be set out in their own words: "The only power which the Government has got, is to fix the rate of premium under Rule 40 of the Rules under the Land Revenue Regulation and the question for us to consider is whether the order of the Government fixing the premium for settlement of 'this land for special cultivation is an order in conformity with Rule 40 x x x x. In our opinion, what Rule 40 provides is to confer upon the Government power to fix the rate of premium in every case which shall be payable for the settlement and it is only the Deputy Commissioner that is authorised to settle the land. The whole purpose of Rule 40 is to confer power on the Government to fix the rate of premium which will be valid for a particular locality and that the Deputy Commissioner has to make the settlement. He is given the power to realise the premium fixed by the Government from time to time and that no document of lease is to be issued before the premium has been paid by the intending holder. But Rule 40 does empower, in our opinion, the State Government to fix the amount of premium in the case of a particular settlement in a particular locality. ********** The power under Rule 40 is a general power for fixing the rate of premium for a particular locality and the Legislature when framing the rules never intended that the Government should be empowered to fix the total amount of premium payable by the intending holder. In our opinion, therefore, the order passed by the Government directing the authorities to offer the land for settlement in case the petitioners pay Rs. 3,86,000 is not in conformity with Rule 40 and this order cannot be given effect to".;