- (1.) The point for decision in this appeal is as to the liability of certain lands situated within the City of Bombay to be assessed to revenue under the Bombay City Land Revenue Act No. 2 of 1876. These lands were originally known as Foras lands, and the rights of the occupants of those lands were settled by Bombay Act No. 6 of 1851, called the Foras Act. What these rights are, is a matter in controversy between the parties, and will be presently considered. Between 1864 and 1867 the Government acquired these lands for the purpose of the B-B. C. I. Railway under the provisions of Land Acquisition Act No. 6 of 1857. On 22-11-1938 these lands, being no longer required for the purpose of the Railway, were sold by the Governor-General to Lady Pochkhanawalla and others as joint tenants under a deed, Ex. A. On 28.3.1939 the survivor of the purchasers under Ex. A conveyed the lands in trust under Ex. B, and the respondents are the trustees appointed under that deed.
(2.) In April 1942 the appellant acting under the provisions of Bombay Act No. 2 of 1876, issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein, and calling for their representation. In their reply, the respondents denied the right of the appellant to assess the lands to revenue, and following it up by instituting two suits before the Revenue Judge for establishing their rights. In their plaints, they alleged that under the provisions of the Foras Act the maximum assessment leviable on the lands was 9 reas per burga, and that the Government had no right to enhance it; that the effect of the land acquisition proceedings between 1864 and 1867 was to extinguish the right of the State to levy even this assessment, and that further, having purchased the properties absolutely from the Governor-General under Ex. A, they were entitled to hold them without any liability to pay revenue thereon. They accordingly prayed for a declaration that the Government had no right to levy any assessment on these lands, or, in the alternative, that such assessment should not exceed what was payable under Bombay Act No. 6 of 1851. The appellant contested the suit. The Revenue Judge held that as a result of the land acquisition proceedings between 1864 and 1867, the lands vested in the Government freed from any liability to pay assessment, and that when the Governor-General transferred them under Ex. A without reserving the right to assess them, the purchasers had the right to hold them without any liability to pay revenue. He accordingly granted a declaration that the appellant had no right to levy assessment, and that the notices issued by him under Act No. 2 of 1876 were illegal. On appeal by the defendants to the High Court of Bombay, it was held by Chagla C. J., Bhagwati J., concurring, that Act No. 6 of 1851 imposed a specific limit on the right of the Government to levy assessments on the lands in question, that, further, by reason of the land acquisition proceedings the right of the Provincial Government to levy assessment even within the limits prescribed by Act No. 6 of 1851 was extinguished, and that when the lands were transferred by the Central Government to Lady Pochkhanawalla and others, they got them as revenue-free lands. In the result, the appeal was dismissed. This appeal by special leave is directed against thin decision.
(3.) The statutory authority under which the appellant seeks to levy assessment on the lands is S. 8 of Bombay Act No. 2 of 1876, and it is as follows : "It shall be the duty of the Collector, subject to the orders of Government, to fix and to levy the assessment for land-revenue. When there is no right on the part of the superior holder in limitation of the right of Government, to assess, the assessment shall be fixed at the discretion of the Collector subject to the control of Government. When there is a right on the part of the superior holder in limitation of the right of Government in consequence of a specific limit to assessment having been established and preserved, the assessment shall not exceed such specific limit." It was on the footing that the respondents were 'superior holders' as defined in the Act, that the appellant issued notices to them in April 1942. In their reply notices and in the plaints, the respondents did not dispute that position, but only contended in terms of S. 8 that they had a specific right in limitation of the right of the Government to assess the lands; and the entire controversy in the Courts below was whether they had established that right. No contention was raised that they were not superior holders as defined in the Act, and that, in consequence, no assessment could be imposed on the lands under S. 8 of the Act.;