Tekan Ard Others v. Ganeshi

WANCHOO, J.-This is an appeal by special leave from the order of the Financial Commissioner Punjab in respect of the application made by the appellant under s. 14-A(i) of the Punjab Security of Land Tenures Act, No, X of 1953, (hereinafter referred to as the Act), read with s. 9 (l) thereof, for ejectment of the respondent, on th6 ground that he was a smaH landowner. The appellant claimed that he was the landowner and the respondent was a tenant-at-will under him. He therefore claimed ejectment of the respondent on the ground that he had less than thirty standard acres and required the land for his oW-U cultivation. The application was filed before the Assistant Collector who held that the respondent was liable to ejectment and allowed the application. Thereupon there was an appeal by the respondent to the Collector and it was urged there that only a landowner could dispossess a tenant-at-will under s. 14-A, (i) and as the appellant was not a landowner but merely a landlord of the respondent he was not entitied to the benefit of s. 14-A(i). The Collector accepted this contention and held that the appellant was not a landowner and therefore allowed the appeal and dismissed the a,Ptllication fOl' ejectment. The appellant then went 1962 Tekan v. Gamshi Wanc1ioo J 196;! 1tk.G11 v. Ga11t1lzi Wa11clioo J. ' . 388 SUPRE~IE COURT REPORTS (!!JOO] SUPP. in appeal to the Commissioner. It may be men­ tioned that the appellant is a lessco from the owner of the land and his lease comprises a larger area of land including the land of which the rospondent is the tenant. Thu contention on behalf of the appellant before the Commissioner was that he was a landowner within the meaning of that word in s. 2 (I) of the Act and was therefore entitled to eject the respondent. The Commissioner held that the position of a lessee was just like a rnortgageo with possession and that a lessee was a landowner for all purposrs. He therefore allowed the appcid and restored the. order of ejcctmcnt passed hy the Assistant Collector. Thereupon the n'spondcnt went in revision to the Financial Commissioner, who held that a mere lessee with only constructive possession as in this case could not be included in tho term "landowner" as used in the Act, and that even if tho appellant was tho landlord of the res· pondent he could not be held to be a landowner within the meaning of the Act. He therefore allowed the revision, snt aside tho. order of the Commissioner and restored that of the Collector dismissing the appellant's application for ejcctment. This was followed by an application by the appe­ llant tu thi.e Co.urt for special leave, which was granted; and that is how the mattor has come up before us. The only question that has been urged on be-. half of the appellant before us-is that. the Financial Commissioner went wrong in holding that he was not a landowner. The question whether tho appe· Hant. is a landowner or not depends upon the definition of that term in the Act, which is. in theee terms:- "(I) 'Landowner' mean8 a person defined as such in tho Punjab Land Revenue Act, 1887, ( Aot XVII of 1887), and shall include an 'allottee' and 'lessee' as defined in clauses (b) and (c) respectively of section 2 of the East .. - 3 S.C.R. SUPREME COURT REPORTS 38\l Punjab Displaced PersonR (Land Resettle­ ment) Act, 1949, (Act XXXVI of 1949) herein­ after referred to as the 'Resettlement Act'. Explanation-In respect of land mortgag­ ed with possession, the mortgagee shall be deemed to be the lando\\ ner." It is not in dispute that the appellant is not an allottee or a lessee as defined in els. (b) and (c) of s. 2 of the East Punjab Displaced Persons (Land Resettlement) Act, (No. XXXVIof 1949). It is also not in dispute. that the appellant is not a mortgagee with possession. Therefore he can only claim to be a landowner within this definition if he is a land­ owner as defined in the Punjab Land Revenue Act, (No. XVII of 1887). In that Act the definition of the word "landowner" as given in s. 3 (2) is in these terms:- " 'landowner' does not include a tenant or an assignee of land revenue, but does in­ clude a· person to whom a holding has been transferred, or an estate or holding has been let in farm under this Act for the recovery of an arrear of land-revenue or of a sum recover­ able as such as arrear and every other person not hereinbefore in this clause mentioned who is in possession of an estate or any share or portion thereof or in the enjoyment of any part of the profits of an estate." The co;ntention on behalf of the appellant is that he must be held to be a landowner within the meaning of this sub-section as he is in the enjoy­ ment of the part of the profits . of the estate. It is obvious that the last part of the definition on which this argument is based applies to persons who are other than tenants and assignees of land revenue, and so we will have to determine whether the appe. Hant is a tenant; if he is, he is not a landowner. We have therefore to go to the Punjab Tenancy Act, (No. XVI of 1887), to fj.nd O!Jt who is a tenant, a11-q Tekoii v. GlUltJhi Wanchoo J. 19G2 T1kan v. Oaneshi ···anchoo J. Mo SUPREME OOURT REPORTS (1962] Su1>.P. whether the appellan.t is a tenant, within that Act. Definition of "tenant" in s. ! (5) of that Act is as follows:- · "(5) 'tenant' means a person who holds land under another person, and is, or but for a special contract would be, liable to pay rent for that land to that other person but it does not include- (a) an inferior landowner, or (b) a mortga~ee of the rights of a land­ owner, or (c) a person to whom a holding has been transferred, or an estate or holding has been let in farm under the Punjab Land Revenue Act, 1887 for the recovery of an arrear of land revenue or of a sum recoverable as such an arrear, or (d) a person who takes from the Govern­ ment a lease of unoccupied land for the pur- pose of sublettillg it;". . It is not in dispute that the appellant does not come within the four exceptions mPntioned in this sub-section. It has therefore to be seen whether the appellant is a person who holds land under another person and is, or but for a special contract ... would be, liable to pay rent for that land to that - other person. We are of opinion that the appellant satisfies this definition of the term · "temmt" in s. 4 ( 5). As a lcBBee be holds land undei another person, namely, tho owner of the land from whom he has taken the lease and is liable to pay rent equal to the lease money for the land which he has taken on lease to that other person. The appellant is therefore clearly a tenant within s. 4 (5) of the Punjab Tenancy Act. He cannot therefore be a landowner under s. 3 (2) of tho Punjab Land Itevenue Aot, Incidentally wo may add that this conclusion is borne out by the fact that in tho copy of the Girdwari entries, the appellant is shown as a ' ' 3 S.C.R. SUPREME COuRT REPoRTS 391 tenant, the entry being "Tekan and others, Gairmau­ rasian first through G~neshi Gair Maurasi second­ half. The appellant is thus a tenant of the land of which he has taken lease and cannot be a landowner. keeping in view the definition of that term in the Act and in the Punjab L.and Revenue Act. The appeal therefore fails and is hereby dismissed with costs. Appeal dismissed. COMMISSIONER OF INCOME-TAX, BOMBAY CITY I, BOMBAY v. BAI SHIRINBAI K. KOOKA (S. K. DAS, J. L. KAPUR, P. B. GAJENDRAGADKAR, A. K. SARKAR, K. SuBBA RAo, K. N. WANCHOO and N. RAJAGOPALA AYYANGAR, JJ.) Income-tax-Profits-Shares purchased by assessee for investment-Sales of Shares subsequently as trading activity­ Oomputation of profit. The assessee purchased shares by way of investment in 1939-40 at a cost price which was much less than their market value on April I, 1945. Her dividend income therefrom was assessed to income tax. In the financial year 1945-46 the assessee converted these shares iuto her stock-in-trade and carried on business in the shares. Per income for the assessment year 1946-47 was computed on the basis of the profits which she made by the sale of her shares as a trading activity. The assessee contended that the cost price of the shares for compu· ting the profits was their market value at the beginning of the year when she started the trading activity, i.e., on April I, 1945. The Department contended that the cost Price of the shares was the actual price for which they were purchased by the assessee, no matter when she bought them and for what purpose. Held (per Das, Kapur, Gajendragadkar, Suhba Rao, Wanchoo and Ayyangar, JJ. Sarkar, J., contra), •h•t the profits IS62 Tekon· v. Gtineshi Wonchoo J. 1962 February 23.