The Tenancy Acts: Pre-emptive Rights for Tenants. Constitutional Perspective.
By Y.Srinivasa Rao, Principal Senior Civil Judge, Tirupati, Andhra Pradesh.
TABLE OF CONTENTS:—
- Pre-emption – Meaning
- The Concept of Substitution
- What is the benefit conferred by the Tenancy Act on protected tenants?
- Pre-emption : Future Domain Doctrine
- Leases of immoveable properties – Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act
- Tenancy Acts – Hindu religious or charitable institutions or endowments under the Act
Introduction:— Mahatma Gandhiji says that India lives in villages. The agriculture is the main avocation to the villagers. Prior to the Constitution came into force on January 26, 1950, the Zamindary system, a ryotwari tenure intermediary between the State and the tiller of the soil, was in vogue. Pandit Jawaharlal Nehru in his Presidential address at the Lucknow Congress Session held on April 12, 1936, stated that the only solution to the India’s problems lies in Socialism in a scientific and economic sense. Socialism is even more than an economic doctrine. It is a Philosophy of Life. There is no way of ending poverty, the vast unemployment, the degradation and subjection of the Indian people except through Socialism. Socialism involves vast and revolutionary changes in the political and social structure ending vested interest in the land etc. See. (1989) 1 AP LJ 138.
“Agriculture farms the backbone of the Indian economy and despite the concerted industrialisation for the last over two decades, agriculture occupies a place ofpride. Being the largest industry in the country, agriculture is the source of livelihood for over 70% of the population in the country. The significance of the agriculture in the national economy can be best explained by considering the role of agriculture under different Beads.” — “Indian Economy” by R. Dutt and K.P.M. Sundaran; 1988 Edition at page 80.
Even under Zamindary or Ryotwari systems, tenancy cultivation has been quite common in India. Cultivation may be done by small proprietors either by themselves or through hired labour or lease to others. The lessees may also be small or marginal farmers or landless labourers. Some times the tenants holding land from an intermediary may sublet for cultivation. Tenants may be sub-divided into three categories;
(1) Occupancy or permanent tenants;
(2) Tenants at will or temporary tenants and
(3) sub-tenants. Occupancy tenants acquire permanent right to lease as adumbrated hereinbefore with heritable right. They enjoy security of tenure which make them virtually the owners ofthe land. See. (1989) 1 AP LJ 138 (infra).
1961 census provides that 17% of the total cultivating households were in the nature of ownership holding 8% on pure tenancy and in 15% mixed tenancy. Compared with this 78% of the total cultivated area was under ownership holding, 4% under the pure tenancy and 18% under the mixed tenancy. Inequality of the land ownership can be judged from the fact that the top 5% of the rural households own more than what the bottom 80% own. As a result, land reforms were brought on statute as a result of the recommendation made by the Central Land Reforms Commission. The Andhra Pradesh Land Reforms Ceiling on Agricultural Holdings Act, 1973 (Act No. I of 1973) was brought on statute with effect from January, 1, 1973. The Act determines ceiling area to a family unit consisting of not more than five members, wife, husband and three minor children depending upon crop pattern and classification. Ac. 10.00 to Ac 18.00 of double-crop wet, Ac. 15.00 to Ac. 54.00 other than double-crop wet lands have been determined. Similar is the case with regard to dry lands of various holdings.
The Preamble to the Constitution of India, which in its part, provides Justice—Social Economic and Political. In42nd Amendment Act, 1976, under Section 2 thereof in the Preamble, the word “Socialist which is implicit in Part IV read with Part III was made explicit. It also assures equality of the status and dignity of the individual to usher in fraternity among the individuals in an integrated and united India. Article 38 as amended in the 44th Amendment Act, 1978, through Section 9 thereof, enjoins the State to strive to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which Economic Justice shall inform all the institutions of the national life and it shall strive to minimise the inequalities in incomes and endeavour to eliminate inequalities in status facilities and opportunities among the individuals and groups of people. Article 39(b) provides that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and (e) provides that the operation of the economic system does not result in the concentration of the wealth and means ofproduction to the common detriment. On heralding independence the land tenure system was in scramble. The tiller of the soil had no security. Several measures have been brought by introducing land reforms like the AndhraPradesh (Andhra Area) Inams Abolition and Conversion into Ryotwari Act, and Estates Abolition Act and conferment ofownership by issuing ryotwari patta to the tiller of the soil introducing ryotwari settlements bringing under direct relation to the State. See. Pavuluri Ramaiah v. State of A.P., 1988 SCC OnLine AP 181.
The word “pre-emption” is concerned, it is a right of substitution conferred on someone either by statute, custom or contract. The right is to step into the shoes of the vendee preferentially, on the terms of sale already settled between the vendor and the vendee, Vijayalakshmi v. B. Himantharaja Chetty, (1996) 9 SCC 376.A right to claim pre-emption is not a right in the estate. It creates an interest in the property. It does not create an interest in succession. If such a right has been created by an agreement, the same can be enforced only in the event any contingency in that behalf takes place. See. Atam Prakash v. State of Haryana, (1986) 2 SCC 249. The right of pre-emption based on consanguinity has been variously described by learned judges as ‘feudal’, ‘piratical’, ‘tribal’, ‘weak’, ‘easily defeated’, etc… Fusing as it does the ties of blood and soil, it cannot be doubted that the right is antiquated and feudal in origin and in character”, Krishna Kumar Birla v. Rajendra Singh Lodha, (2008) 4 SCC 300.
In India, the States such as Andhra area of Andhra Pradesh,Punjab , Haryana. Maharashtra and West Bengal) allows tenants a continuing right of pre-emptive purchase. Before the landlord intends to sell the land to a third-party, he shall offer first the tenant to purchase the land.
In pretio emptionis et venditionis naturaliter licet contrahentibus se circumvenire means “ in the price of buying and selling, it is naturally allowed to the contracting parties to overreach each other.”
Nulla emptio sine pretio esse potest. It means “There can be no sale without a price.”
Pre-emption – Meaning:— In Govinda Dayal vs. Inayatulla [ILR 7 A1] 775 at page 909 (F8)] is worth reference, which explained the right of pre-emption in the following words: “It (right of pre-emption) is simply a right of substitution entitling the preemptor by means of a legal incident to which the sale itself was subject, to stand in the shoes of the vendee, in respect of the rights and obligations arising from the sale under which he has derived his title. It is in effect, as if in a sale deed, the vendee’s name was rubbed out and the pre- emptors’s name was substituted in his place.
Important factors :—
- First first offer to sell the property must be to the lessee. (Ex:- See. Sec. 2 (3) of the Punjab pre- emption Act.) – “A right to acquire by purchase an immoveable property in preference to other persons by reason of such right”
- In case of any violation of the right of pre-emption, the lessee may sue the lessor to get its fulfilment or may claim compensation.
- Generally, three types of properties on which right of pre-emption can be claimed . 1. Agricultural land; 2. Village Immovable property; and 3. Urban immovable property.
- Right of pre-emption cannot be claim against Waqf property and property acquired or owned by Federal or Provincial Government
- Pre-emption right cannot be arisen out of gift, sadagaha, lease , waqf, inheritance or bequest.
The Concept of Substitution:— The concept of substitution from that long and even before has been the foundation of the law of pre-emption and has been noticed, followed and employed, time and again, in a catena of decisions. The fact that the Supreme Court in Atam Pradesh vs. State of Haryana [1986(2) SCC 249] has struck down the right of pre-emption based on consanguinity as a relic of the feudal past, inconsistent with the constitutional scheme and modern ideas, has not altered the situation that the right of pre-emption, wherever founded, whether in custom, statute or contract, is still a right of being substituted in place of the vendee, in a bargain of sale of immovable property.
The Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950, (Act No XXI of 1950) has its own history behind it. It has come into vogue as a result of the heroic fight by the agricultural class organised by the democratic force to give the security of the tenure to the tillers of the soil. It determines the family holdings. The cultivator has been given protected tenancy. The maximum rent has been determined under Secs. 11 and 12 and the liability topay the rent at a rate not exceeding the one specified in Sec. 11 was given under Sec. 13. Sec. 14 prohibits to receive rent in terms of labour. Sec 17 provides determination of the reasonable rent. Sec. 18 grants suspension or remission ofthe rent. Sec. 19 gives with non obstante clause protection from termination of the leases. Sec. 20 creates bar of eviction from dwelling houses. Sec. 27 accords relief against illegal termination of tenancies. Sec. 28 provides relief of termination of tenancy for nonpayment. Sec. 32 provides the procedure for taking possession. Chapter IV in Sec. 34 declares who are the protected tenants Sec. 36 gives power tohim to recover possession. Sec. 37 declares, though a certain class, other than those governed by Sec. 34, to be protected tenants. Sec. 37-A also equally serves the same purpose. Sec. 38 gives right to the protected tenant to purchase the land in the manner prescribed thereunder. Sec. 38-A provides procedure for payment of the reasonable price. Sec. 38-B provides procedure to the landlord to agree to relinquish his rights in favour of the protected tenant. Minimum holdings in cases of sale is adumbrated in Sec. 38-C. Sec. 38-D provides procedure when the landlord intends to sell the land to a protected tenant and Sac. 38-E confers ownership of the land held by the protected tenantand transfer thereof and Sec. 40 declares those rights to be heritable. Sec. 44 gives right to the landlord to terminate the protected tenancy, etc. See.Pavuluri Ramaiah v. State of A.P., 1988 SCC OnLine AP 181.
What is the benefit conferred by the Tenancy Act on protected tenants?
As noticed from various provisions in Chapter III, a tenant continues to be tenant and he has no right to compel the landholder to sell the land to the tenant. In the case of a protected tenant, however, he has two ways of acquiring absolute title to the land and tenancy. Under Section 38 of the Tenancy Act, a protected tenant can file application before the Tenancy Tribunal expressing his willingness to pay for the landholder’s interest and when once the Tribunal decides the amount of reasonable price for such purchase, where upon the tenant deposits the same, the landholders has no choice except to part with the land. The landholders can also relinquish the land in favour of protected tenants under Section 38-B of Tenancy Act. Apart from this A.P. (Telangana Area) Tenancy and Agricultural Lands (Amendment) Act, 1971 (A.P. Act No. 15 of 1971) introduces Section 38-E which transferred the right of a protected tenant to purchase from the landholder into ownership right with effect from the date of coming into force of A.P.Act No. 15 of 1971. The ownership of all tenanted lands shall vest in the protected tenant holding the land or those protected tenants were deemed to have been held such lands. Even if a person who claims to be protected tenant is not in possession of the tenanted land, the same has no effect on Section 38-E(1) of the Tenancy Act, which converts the tenancy into absolute right vesting in the tenant. See.Lakshmi Bai v. Chinnaiah And Ors.
In Sada v. Tahsildar, Utnoor, Full Bench held that restoration of possession to the protected tenant under the Explanation to Section 38-E(1) of the Tenancy Act is not a condition precedent for grant of ownership certificate.
Pre-emption : Future Domain Doctrine:—
In it was observed as under:
142. A right to claim pre-emption is not a right in the estate. It creates an interest in the property. It does not create an interest in succession. If such a right has been created by an agreement, the same can be enforced only in the event any contingency in that behalf takes place. A Will is not a transfer for enforcement of a right of pre-emption under a contract. It must be enforced by a suit. On the right of pre-emption based on consanguinity being unconstitutional, we may notice the decision of this court in Atam Prakash v. State of Haryana @ Ors. [(1986) 2 SCC 249], wherein while striking down Section 15(1)(a) of the Punjab Pre-emption Act, 1913 as being ultravires of Article 14 of the Constitution it was opined at Paragraph 2:
“The right of pre-emption based on consanguinity has been variously described by learned judges as ‘feudal’, ‘piratical’, ‘tribal’, ‘weak’, ‘easily defeated’, etc.[Kalwa v. Visakha Singh A.I.R. 1983 Punjab & Haryana 480 (F.B.) at 490 and Bishan Singh v. Khazan  S.C.R. 878.] Fusing as it does the ties of blood and soil, it cannot be doubted that the right is antiquated and feudal in origin and in character.”
It was thus held :
“We are thus unable to find any justification for the classification contained in Section 15 of the Punjab Pre-emption Act of the kinsfolk entitled to pre-emption. The right of pre-emption based on consanguinity is a relied of the feudal past. It is totally inconsistent with the Constitutional scheme. It is inconsistent with modern ideas. The reasons which justified its recognition quarter of a century ago, namely, the preservation of the integrity of rural society, the unity of family life and the agnatic theory of succession are today irrelevant. The list of kinsfolk mentioned as entitled to pre-emption is intrinsically defective and self-contradictory. There is, therefore, no reasonable classification and clauses ‘First’, ‘Secondly’, and ‘Thirdly’ of Section 15(1) (a), ‘First’, ‘Secondly’ and ‘Thirdly’, of Section 15(1) (b), Clauses ‘First’, ‘Secondly’ and ‘thirdly’ of Section 15(1) (C) and the whole of Section 15(2) are, therefore, declared ultra vires the Constitution.”
‘Ahmad Khan v. Jang Baz Khan’, AIR (11) 1924 Lah 210, in this case Campbell, J. held that the landlord of an occupancy tenancy (qua landlord) is not entitled to sue under Section 21 of the Punjab Pre-emption Act, 1913, for pre-emption of that tenancy against a person having a superior right of pre-emption under Section 15 (a) (b) of the said Act. According to the learned Judge landlords have no rights at all under the Pre-emption Act, and hence the landlords in that case could not succeed against the co-sharers. In the course of his judgment the learned Judge observed as follows:
“He (the landlord) has come into Court as a plaintiff to assert a right which he does not possess under the law of pre-emption. * * * His position is much more favourable than that of any pre-emptor, and this is why we find that Section 15 of the Punjab Pre-emption Act confers a right on an occupancy tenant to pre-empt his landlord’s proprietary land Section 15 (c) ‘fourthly) but confers no right on the landlord to preempt in that capacity his occupancy tenant’s rights in land owned by himself, and confers a right to pre-empt those rights upon other persons, who are owners in the same estate but otherwise are in no way connected with the tenancy.”
Leases of immoveable properties – Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act:—
The Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966 (Act No. XVII of 1966), for short “the preceding Act” was in force. Section 74(1)(d) of the preceding Act deals with the leases of immoveable properties belonging to or given or endowed for the purpose of any charitable or religious institution or endowment. It declares that the existing leases shall continue to be in force till the expiration of the period on the same terms and conditions as on that date. Section 74(1)(dd) provides the authority to sanction such leases shall be as may be prescribed in the rules. Under Section 74(1)(e) the Government shall constitute area Committee “to fix reasonable rent” for the agricultural lands leased out to a tenant. That Committee shall fix “the reasonable rent” and “determine the other terms and conditions of the lease” relating to land in accordance with Rules as may be made inthis behalf. The rent so fixed and the terms and conditions so determined shall have effect notwithstanding anything inany other law for the time being in force relating to the tenants. An appeal has been provided against that order to the Commissioner. The Commissioner is given power under sub-section (2)(a) of Section 74 to terminate or cancel the leases etc., who contravene the provisions under sub-section (1) ofSection 74 after giving him an opportunity to make his representation against the proposed termination or cancellation, etc. The consequence of taking delivery of possession or taking action for delivery ofpossession in case of non-delivery have been provided for. Except to the extent provided in Section 74 of the preceding Act, the Andhra Pradesh (Andhra Area) Tenancy Act, 1956 (Act XVIII of 1956) as amended by Act No. XXXIX of1974, which amendment came into force with effect from July 1, 1980 and Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act (Act XXI of 1950), for short, “the Tenancy Acts” were applicable to leases of agricultural lands belonging to or owned by the Hindu religious or charitable institutions or endowments. The Tenancy Acts also received the assent of the President. Act XXI of 1950 is a permanent Act and Act 18 of 1956 was a temporary Act extended from time to time until the Amendment Act No. XXXIX of1974 came into force on July 1, 1980. The Tenancy Act applies to the entire Andhra Area of Andhra region ofAndhra Pradesh and for Telangana Area, the AndhraPradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950 is applicable. Section 2(e) of the Tenancy Act defines “Landlord” has been defined under Section 2(f). Under Section 3, “maximum rent” payable by a cultivating tenantto a landlord in terms of gross produce shall be in respect of crops grown on irrigable lands 30% of the gross produceand in respect of every crop grown on any other land, including unirrigable land, is 25% of the gross produce. Section 4 fixes execution of an agreement and its terms and it is unilaterally unalterable. Section 5 provides agreement as torent. Section 6 determines fair rent and Section 8 gives power to the Special Officer to grant remission of rent in cases of total or partial failure of the crops in any year due towidespread calamities. On unpaid rent, interest at 51/2% was determined under Section 9. Section 10 introduced through Amendment Act XXXIX of 1974 declares by sub-Section (1) of Section 10 that the subsisting tenancy “shall be inperpetuity. The leases shall be in writing with material particulars and be registered. On expiration thereof, every such lease shall be renewable successively for a further minimum period of six years at a time under Section 10(2). The lease so renewed shall be subject to the provisions of Sections 3 and 6. Sub-section (4) gives with a non obstante clause declaring it shall be lawful for a cultivating tenant to mortgage or create a charge on his lease-hold interest in the land infavour of the Government, co-operative society, including land mortgage bank or in other institution to secure the loans under the relevant rule relating to the grant of loans to agriculturists for the time being in force. Sub-section (6) declares that all rights of cultivating tenants under this section shall subject to the provisions of Sections 12 and 13 be heritable”. Despite change of ownership cultivating tenantshall be entitled to continue the tenancy on the same terms and conditions as before. Section 12 gives right of resumption of the lands. Section 13 gives right to the landlord toterminate the tenancy notwithstanding anything contained in Sections 10 to 12. Section 15 gives right of pre-emptionas the first chance to the tenant. Section 16 gives power and jurisdiction to the Special Officer and the District Court to adjudicate upon all the disputes and appeals arising under the Act between the landlord and the cultivating tenantin relation to the matters not otherwise decided by the Special Officer under the Rules of this Act. The proviso thereto excludes the applicability of the Act for fixation of reasonable rent and or the determination of the other terms and conditions of the lease governed by Section 74(1)(e) of the preceding Act. Sub-section (2) gives right of appeal to the District Court. Section 17 overrides the contract and oilier laws. Section 18 saves only certain lands, the details of which do not detain us as they are not relevant. Under sub-section (2) thereof, Sections 3 to 7 shall not apply to leases of the lands belonging to or given or endowed toany charitable or religious institution or endowment falling within the scope of sub-section (1) of Section 74 of the preceding Act. But other provisions of the Act shall apply toevery such lease except to the following modification, namely, (i) the word “rent” under the Tenancy Act and the fixation of the reasonable rent under clause (e) of sub-section (1) of Section 74. In sub-section (3) of Sec. 10 and insub-section (3) of Sec. 12, for the expression “subject to the provisions of Sections 3 and 6” the expression “subject tothe provisions of clause (e) of the said sub-section (1) ofSection 74” shall be substituted. Section 21 repeals only the Andhra Cultivating Tenants Protection Ordinance, 1956 (Andhra Ordinance No. I of 1956). Section 155 of the Act repeals the preceding Act and the Tirmnala Tirupathi Devasthanams Act, 1979. But no express repeal of the Tenancy Acts. See. Pavuluri Ramaiah v. State of A.P., 1988 SCC OnLine AP 181.
Tenancy Acts – Hindu religious or charitable institutions or endowments under the Act:—
The immediate question, therefore, is whether the Tenancy Acts in their application to the extent of leases inrelation to the agricultural lands belonging to, owned or endowed to any Hindu religious or charitable institutions or endowments under the Act is repugnant to the provisions of the Act Section 82 of the Act totally exterminates the existing leases and puts an end to the jural relationship oflandlord and cultivating tenant between the institutions or endowments and the cultivating tenants except to the extent of the landless poor lessees, subject to sub-section (2) thereof. The Tenancy Acts assure tenancy in perpetuity with heritable right; right to fixation of fair rent and continuity of tenancy despite change of ownership; and liability toejectment is only on proof of contravention of Section 13, etc. Thereby there is apparent repugnancy and irreconcilable conflict between the area of operation of Section 82 and the provisions of the Tenancy Acts. Since Both Section 82 in relation to agricultural leases being a special law employing non-obstante clauses, and the Tenancy Acts also being special law, giving protection to the cultivating tenants and protected tenants excluding their operation to any other law, the inescapable conclusion is that the later being inconsistent with the former, the former of necessity and by implication stands repealed to the extent of the leases governed by the provisions of Section 82.
A scenario is set to get into the crucial question baffling from the facts presented. The question raised is that Section 82 is arbitrary, discriminating the lessees-cultivators in possession and enjoyment of the lands belonging to, owned or endowed by the Hindu religious and charitable institutions or endowments from the general class of cultivating or protected tenants governed by the provisions of the tenancy Acts. The classification is arbitrary and irrational and made no discernible differentia except arbitrary exclusion of their leasehold rights from the purview of the Tenancy Acts, violating Article 14 of the Constitution. See.Pavuluri Ramaiah v. State of A.P., 1988 SCC OnLine AP 181. Minerva Mills Ltd. v. Union of India, AIR 1980 SC 1709; D.S. Hakara v. Union of India, AIR 1983 SC 130; Ram Krishna Dalmia v. S.R. Tendolkar AIR 1958 SC 538.
In Re. Special Courts Bill, AIR 1979 SC 478, it was held : “3. The Constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the Invention and application a of precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary.”
In Pavuluri Ramaiah v. State of A.P., 1988 SCC OnLine AP 181, it was held as under:
“The Tenancy Acts were made in implementation ofthe Directives contained in Articles 38 and 39 and the Preamble to the Constitution to render Social and economic Justice to the tiller of the soil to accord security of tenure, fixation of fair rent, heritable right with rightto encumber the leasehold lands to the nationalised banks, etc., to augment the productivity. The definition ‘cultivating tenant’ and the operation of the Tenancy Acts includes within their ambit the cultivating tenants of the lands belonging to, owned or endowed to charitable or religious institutions or endowments. In the predecessor Act 17 of1966, Section 74(e) and Section 18(2) of Act 18 of 1956 excludes the applicability of the Tenancy Act only to the extent of fixation of the reasonable rent by an Area Committee and terms and conditions thereof while preserving the rights accrued under the Tenancy Acts. As seen, the Act was made by amending the predecessor Act to bring about efficient administration of the charitable and Hindu religious institutions or endowments and as part thereof, the agricultural lands belonging to owned or endowed to the Charitable or Hindu religious institutions or endowments were also sought to be dealt with under Section 82 pursuant to the recommendation made by the Justice Kondaiah Commission. In Avula Hanuma Reddy’s Case (22 supra), Kondaiah, J. (as he then was) speaking for the Division Bench while considering the effect of Section 74(1)(e) on the Tenancy Act (Act No. 18 of 1956) held that the Tenancy Act assures tothe cultivating tenant that he should not have a feeling that he would be removed by the landlord at any time he likes or after the expiry of the agreed period of lease, and if he is assured of a minimum period of lease, he would, with better facility and feeling, make every effort to improve the land and produce more which would certainly be in the larger interests of the society and the country…… The termination of the tenancy cannot, except for any of the reasons specified in Section 13, be made by the landlord. The Tenancy Act is applicable also to the lands owned by or endowed or given to religious or charitable institutions. Section 74 ofthe Predecessor Act applies to immoveable property including agricultural lands. Clause (e) of sub-section (1) of Section 74 gives power to the Area Committee to fix reasonable rent and determine the other terms and conditions ofthe lease relating to rent which shall prevail over any other law to that extent. Section 75(1) makes the person, who continues to remain in possession of the land after the expiry or termination or cancellation of the lease granted tohim, as an encroacher within the meaning of sub-section (2) of Section 75. The Deputy Commissioner is given power under Section 76 to have the leases ejected. The object thereby is that the Tenancy Act saves its provisions to have its operation in relation to leases under the Predecessor Act 17 of 1966. The Tenancy Act would apply save to the extent prohibited under the Predecessor Act, to all leases and will continue to subsist. But the reasonable rent determined under Section 74 cannot be termed as arbitrary. The lease inSection 74 not only applies to contractual leases, but also statutory leases negating the contention of the State that it would not apply. It also negatived the plea of the State that the Area Committee could stipulate the period of lease as part of the terms and conditions mentioned therein. But, it relates to rent, i.e., the mode and date of payment of rent, but not the period of lease or cancellation or termination ofthe lease. The intention of the legislature, thereby, was held to be “to safeguard the interests of the cultivating tenantby allowing him to continue even after the expiry of the agreed term of the lease as per the provisions of the Tenancy Act.” Thereby it held that there was no conflict between the Tenancy Act and Predecessor Act No. 17 of 1966. Thus, it held that Section 74(1)(e) of the predecessor Act would provail over the Tenancy Act.”
In the latest Conference of the Revenue Ministers of all the State, to which the State of Andhra Pradesh is also a party, held on May, 18, 1985, in the proceedings and resolutions in paragraph 6.6.10 it was stated thus:
“In a number of States, e.g., Andhra Pradesh, Orissa and Tamil Nadu, too much land is reportedly held by religious and other institutions. No doubt sources of reasonable income must be left with them but it is neither desirable nor necessary for them to maintain large areas of agricultural land. Alternative sources of income like provision of annuity may be considered in order tocompensate these institutions for the loss of land that they may be subject to. Tenants on these lands should get security of tenure and ownership.”
The landless poor lessees who has been in continuous possession for not less than six years has been given right of pre-emption of the lands on payment of seventy five per cent of the prevailing market value of the neighbourhood lands similarly situated consideration thereof is to be paid in four equal instalments as prescribed by the rules. It is common knowledge that agriculturists are subject to frequent and repeated fury of the nature, ofdevastating floods, cyclones, etc. damaging mostly if not totally the crops raised. Even the damage by seasonal widespread calamities like mosquito menace also is held to be a fury of nature (Vide DNB Annadana Satram v. K. Yakobu 1988 -II ALT 29 (SN). Landless poor farmer defined under the Act is one who is possessed of only less than two and half acres of wet land or five acres of dry land. If the crops are devastated due to fury of nature he not only loses the crop but also the entire investment he made thereon on raising loans. It takes long time to recover from the indebtedness. His failure to pay the consideration in four equal instalments in the manner prescribed entails him to lose the property. Then the leasehold right of property will be sold by tender-cum-public auction. The indication thereof is that it will again be put to lease-cum-auction thereby it would appear that the lands will be passed off from their hands into the hands of the rich and influential persons who alone can afford to participate in the public auction and outwit the marginal and weak or landless poor farmers defeating the constitutional goal of rendering social and economic justice to the tiller of the soil. This procedure is nothing short of the often quoted edage “Robbing Peter to pay Paul.” On conferment of ownership right under Section 38-E or purchase under the Tenancy Act (Act 21 of 1950), etc., the mode of payment of value of the land to the landlord, is prescribed under the provisions of the Act 21 of 1950 and the rules made thereunder. That also does not appear to have been taken note of. Therefore, the fixation of payment ofsale consideration by the landless poor lessee in ‘four’ equal instatments under sub-section (2) of Section 82 appears tobe arbitrary offending Articles 14 and 21 of the Constitution.
Under Section 17(4) of the Land Acquisition Act, providing house sites to poor is a public purpose. The Land Acquisition Act itself provides the mode of acquisition be it either under compulsory notification issued under Section 4(1) or by negotiations with the owner of the Property. It is not necessarily by acquisition. It is true that Section 15(1) as amended under Act 39 of 1974 gives right to a cultivating tenant and an obligation on the Part of the landlord to make an offer and give first preference to the cultivating tenant to purchase the lands. These are to be in case of voluntary sales between the private individuals. Certainly in an appropriate case where the sale of the lands belonging to the Charitable or Hindu religious institutions or endowments are being made to private individuals certainly the cultivating tenant is entitled to preferrential claim and first offer should be made to him under Section 15(1). It is common knowledge, that the State Government has undertaken in massive scale acquisition of private lands to provide house sites to poor viz., the Scheduled Castes, Scheduled Tribes and Backward Class and other economically weaker sections of the Society. The preamble and Article 46 of the Constitution provide right tosocial and economic justice to the poor; a first charge on the State. Instead of proceeding for acquisition of private lands, when the lands belonging to charitable or religious institutions or endowments which are public in character are available and to be sold, it is always open to the State under Section 154 of the Act read with Section 74 of the predecessor Act to grant exemption from the provisions of the Act and permission given for alienations or the Social welfare Department for public purpose. In Municipal Corporation, Ahmedabad v. Jan-Mohammed (1986) 3 SCC 20: AIR 1986 SC 1205 at 1212 (42) para 19 Chinnappa Reddy, J. speaking for the Court held:
“The expression ‘in the interest of public’ is of wide import comprehending public order, public health, public security, morals, economic welfare of the community and the objects mentioned in Part IV of the Constitution. Nobody can dispute a law providing for basic amenities for the dignity of human labour like provision for water,……..as a social welfare measure in the interest ofgeneral public. Likewise in respect of legislations and notifications concerning………the other amenities for the working class, the courts have adopted a liberal attitude and the interest of the workers has been protected notwithstanding the hardship that might be caused to the employers. It is therefore open to the legislature or the authority concerned, to ensure proper holidays for Municipal staff working in the Municipal slaughter houses and provide certain closed days in the year.”
Conclusion:— “The need and scope for land reforms in a developing economy”, in the 1981 Edition, the authors at page 383 in Chapter 26 stated: “Productivity in agriculture is mainly dependent on two sets of factors—technological and institutional—the institutional reforms includes the re-distribution of land ownership in favour of the cultivating clauses so as toprovide them clause of participation in rural life, improving the size of farms, providing security of tenure, regulation of rents etc. In other words, the institutional factors such as the existence of feudal relationships small size farms, sub-division and fragmentation in security oftenancy rights, high rents, etc., act as disincentive to the peasantry to raise production. They weaken the capacity of the farmers to save and invest in agriculture as also to enjoy the fruits of their labour Emancipation of the peasantry from the bondage of institutional depressors will unleash forces which shall automatically raise the levels of production in agriculture”.
As was held inRanjit Singh v. State of Punjab AIR 1965 SC 632, “The scheme of rural development envisages not only equitable distribution of land so that there is no undue imbalance in society resulting in a landless class on the one hand and a concentration of land in the hands of a few on the other, but envisages also the raising of economic standards and bettering rural health and social conditions.—If agrarian reforms are to succeed, mere distribution of land to the landless is not enough. There must be a proper planning of rural economy and conditions and a body like Village Panchayat is best designed to promote rural welfare than individual owners of small portions of lands.”
Relating to Tenancy Reforms, security of tenure is to be given to the tenant by regulation of conditions of eviction. For eviction the legally prescribed procedure is to be followed. A tenantis ensured of secure rights in land provided he does not default in payment of rent, or and uses the land for agricultural purposes and does not misuse it in a manner that damages its inherent fertility. As to pre-emption , to say in short, in the event of a sale of property the lessor is required to first offer such property to the lessee. Therefore, it is often also called as right of first offer. Where the lessor violates the pre-emption right, the lessee may claim fulfilment or compensation.