KUNJ BEHAR! LAL BUTAIL A."'ID ORS. v. STATE OF HIMACHAL PRADESH AND ORS.

The Judgment of the Court was delivered by

R.C. LAHOTI, J. Leave granted. E To consolidate and amend the laws relating to ceiling on land hold- ings in the State of Himachal Pradesh, the Legislative Assembly of Himachal Pradesh enacted Himachal Pradesh Ceiling on Land Holdings Act, 1972 (hereinafter 'the Act', for short). Sub-section (1) of Section 26 of the Act provides that the State Government may, by notification, make F rules for carrying out the purposes of this Act, Sub-sections (2) and {3) thereof provide for previous publication of the rules and the rule being laid on the floor of the State Legislature as soon as may be after it is made. In exercise of the power so conferred the State Government has framed the Himachal Pradesh Ceiling on Land Holdings Rules, 1973 (hereinafter 'the G Rules', for short), Rule 3 thereof reads as under :

''3. Areas to be treated as subservient to tea plantation. - {l) The following areas shall be treated as subservient to tea plantation :

(a) areas on which there is programme for expansion of tea H

p. 1058

A plantation during next ten years which will be determined by the State Government;

(b) areas c.overed by forests and forest growth of which the fuel wood, timber is required for the manufacture of the tea and maintenance of tea estatt:; B (c) low-lying lands which generally serve as water reservoirs for the use of tea plantation; and

( d) land on wh~ch tea factories, labour quarters, playgrounds and other ancillary buildings are situated. c Provided that no land, treated as subservient to tea plantation under this sub-rule and exempted from the operation of the Act under Section 5l(g) thereof, shall be transferred by the landowner in any manner, without the permission of the State Government. D (2) The owner of the tea estate will submit return in Form C-1 to the Collector showing the areas he intends to include for the purpose of c:lause (a) of sub-rule (1) within one month from the date on which these rules will come into force. The Collt:ctor on receipt of this return shall make such inquiry as he deems fit and thereafter send his recommendations to the State Government for orders which will be final."

The pro\'iso appended to sub-rule (1) and placed just bdow clause (d) of sub-rule (1) was not there in the text of the Rules as originally framed. It has been inserted by amendment through Notification No. 10-5n3-II Rev.B dated 4.4.86. This amendment was published in Gazette Extraordinary dated 26.4.86.

On 21.8.90 the Registrar Kangra District at Dharmshala issued a G general circular to all Te.!isildars-cum-Sub-Registrar (of deeds) in Kangra District containing the following direction :

"It has been brought to the notice of the Government that the land owners are selling land exempted from the provisions of the H.P. Ceiling on Land Holdings Act, 1972. Therefore you are H directed not to register the sale deeds in respect of such lands,

K.B.L BUTAIL v. STATE [R.C. LAHOTI, J.) 1059

and take action in such cases under the provisions of the Land A Ceiling Act, 1972 and intima.te of the same to the Deputy Com- missioner also so that proper guidance is given by him."

It is the constitutional validity of amendment made in the Rules by notification dated 4.4.86 (published on 26.4.86) and the circular order dated 21.8.90 which has been put in issue by a writ petition filed by the B appellants. The cause of action arose to the appellants because their effort at alienating a piece of land subservient to tea plantation was sought to be put into jeopardy.

Shri Anil Divan, the learned senior counsel for the appellants has raised two pleas; (i) that the Act is not applicable to land subservient to c tea estates and therefore a provision made in the Rules framed in exercise of powers delegated by the Act but proposing to make provision as regards a subject excluded from within the purview of the Act is ultra vires the provisions of the Act; (ii) that the prohibition imposed by the amended rule suffers form the vice of arbitrariness and unreasonableness inasmuch as though an alienation of land forming part of tea plantation itself is not prohibited either by the Act or the rules but alienation of land subservient to tea plantation is sought to be restrained.

Section 4 of the Act defines the permissible area which a landowner, a tenant or a mortgagee with possession or a person holding partly one or other of the abovesaid status may hold Section 6 pli:CL-s a ceiling on the entitlement to hold any land beyond witut is permitted by the Act. Section 7 empowers ilic State Government to determine the surplus circa of the land held by any one ignoring the transfer after the appointed day of a land held in excess of the permissible except bona fide transfers. Section 5 of the Act provides for Exemptions and enacts that the provisions of this Act shall not apply amongst others to "tea estates". Section 5 reads as under :

"5. Exemptions. - The provisions of this Act shall not apply to -

(a) lands owned by the State Government or the Central Govern- G ment;

(b) lands belonging to registered Co-operative Farming Societies;

Provided that the share of a member of such society, together with his other land, if any does not exceed the permissible area; H

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A (c) lands belonging to Land Mortgage Banks, the State and Central Co-operative Banks and any other Banks as defined in the Explanation - not reproduced.

(d) lands be.longing to or vested in local authorities;

B (e) lands belonging to Himachal Pradesh Agriculture University;

(f) lands owned by the Bhudan Yagna Board established under the law in force in the State of Himachal Pradesh and

(g) tea estates." c Shri Anil Divan, the learned senior counsel for the appellants sub- mitted that lands covered by seven catt:gories as defined in clauses (a) to (g) of Section 5 have been excluded from applicability of the provisions of the Act. Section 26 dekgates to the Stab: Government the legislative power D of making rules which delegation is circumscribed by the expn:ssion - 'for carrying out the purposes of this Act'. In exercise of such delegated power to legislate, the State Government cannot brine; within the net of the rules what has been excluded by the Act itself. We find merit in the submission so mode. Tea estates are excluded from the provisions of the Act by E Section 5. 'Tea estate' 1s defined in the interpretation clause of the Act to mean an area under tea plantation and includes within the definition 'such other area necessary for purposes subservient to a tea plantation as may be prescribed'. Ruk 3 defines what areas shall be treated as subservient to tea plantation. The amendment made vide notification dated 4.4.86 places an embargo on right to transfer such subservient land though exempted F from the operation of the Act. Clearly the impugned proviso is beyond the rule making power of the State Government as conferred by the Act. It is well settled that the Legislature cannot delegate its essential legislative functions which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct. G What is permitted is the delegation of ancillary or subordinate legislative functions, or, what is fic:tionally called, a power to fill up the details, (See : Principles of Statutory Interpretation, Justice G.P. Singh, Seventh Edition 1999, at pp.689-690).

In Supreme Court Employees Welfare Association v. Union of India, H AIR (1990) SC 334, this Court has held :

K.B.L. BUTAILv. STATE(R.C. LAHOTI,J.] 1061

"A delegated legislation or a subordinate legislation must confirm A exactly to the power granted." (para 62)

"Rules whether made under Constitution or a statute, must be intra vires the parent law under which power has been delegated." (para 98) B In General Officer Comma11di11g-i11-Chief & AllT. v. Dr. Subhash Candra Yadav & Anr., AIR (1988) SC 876, it has been held :

"Before a rule can have the effect of a statutory provision, two conditions must be fulfilled, namely, (1) it must conform to the provisions of the statute under which it is framed; and (2) it must C i also come within the scope and purview of the rule making power of the authority framing the rule. If either of these two conditions is not fulfilled, the rule so framed would be void.'

In the abovesaid case, the rule making provision of the Cantonment D Act conferred power of the Central Government to make rules in the matter of "the tenure of office, salaries and allowances, provident funds, pensions, gratuities, leave of absence and other conditions of service of servant. of boards." In exercise of this power, the Central Government framed rules to make provision for transfer of the employees of the Boards. It was held that the rule was in excess of the rule making power given to the Central Government.

The Government while framing rules under the Bihar Money Lenders Act, 1938 fixed the upper limit for the loans which the money lenders could lend though the Act nowhere provided for the fixing of such upper limit. In Sant Saran Lal v. Parsuram Saha, AIR (1966) SC 1852 1t was held that the rule making power of the Government does not extend to the fixing of such a limit as it was not empowered by the Act.

It is very common for the legislature to provide for a general rule making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the test of having been so framed as to fall within the scope of such general power confirmed. If the rule making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the H

1062 SUPREME COURT REPORTS (2Q00] 1 S.C.R. A parent Act, (See : Sant Saran Lal & Anr. v. Parsuram Sahu & Ors., AIR · (1966) SC 1852, para 19. From the provisions of the Act we cannot spell out any legislative:: inte.nt delegating expressly, or by necessary implication, the power to enact any prohibition on transfer of land. Wt: are also in agreement with the submission of Shri Anil Divan that by placing complete prohibition on transfor of land subscrvic::nt to tea estates no purpose sought to be achieved by the Act is advanced so also such prohibition cannot be sustained. Land forming part of tea c::state including land sub- servient to tea plantation have been placed beyond the:: ken of the Act. Such land is not to be taken in account either for calculating area of surplus land or for calculating area of land which a person may retain as falling within ceiling limit. We fail to understand how a restriction on transfer of such land is going to carry out any purpose of the Act. We are fortified in taking such view by the Constitution Bench decision of this Court in Maharao Sahib Sltri Bltim Singltji v. Union of India Ors., (198111 SCC 166 whereby sub-section (1) of Section 27 of the Urban Land (Ceiling and Regulation) Act, 1976 was struck down as invalid insofar as it impost:d a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building which was within the ceiling area. The provision impugned therein imposed a restriction on transactions by way of sale, mortgage, gift or lease of vacant land or buildings for a period exceeding ten yc::ars, or otherwise for a period of ten years from the date of the commencement of the Act even though such vacant land, with or without building thereon, fell within the ceiling limits. The Constitution Bench held (by majority) that such property will be transforable without the constraints mentioned in F - sub-section (1) of Section 27 of the said Act. Thc::ir Lordships opined that tlie right to carry on a business guaranteed under Article 19(l)(g) of the Constitution carrit:d with it the right not to carry on business. It logically followed, as a nc::cessary corollary, that the right to acquire, hold and dispose of property guaranteed to citizens under Article 19(l)(f) carried G within it the right not to hold any property. It is difficult to appreciate how could a citizen be compelled to own property against his will though he wanted to alienate it and the land being within the ceiling limits was outside the purview of Sc::ction 3 of the Act and that being so the person owning the land was not governed by any of the provisions of the Act. Reverting H back to the case at hand, the learned counsel for the State of Himachal

K.B.L. BUTAIL v. STATE [R.C. LAHOTI, J.) 1063 Pradesh has not been able to satisfy us as to how such a prohibition as is imposed by the impugned amendment in the Rules helps in achieving the object of the Act.

We are also of the opinion that a delegated power to legislate by making rules 'for carrying out the purposes of the Act' is a general delegation without laying down any guidelines; it cannot be so e:g:ercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself.

For the foregoing reason, the appeal is allowed. The judgment of the High Court is set aside. The proviso inserted into sub-rule (1) of Rule 3 C of the Himachal Pradesh Ceiling on Land Holdings Rules, 1973 by the notification dated 4.4.1986 {published in the Himachal Pradesh Govern- ment Gazette dated 26.4.86) and the circular order dated 21.8.90 issued by the Registrar, District Kangra at Dharmshala are declared invalid and struck down as ultra vires the powers of the H.P. Ceiling on Land Holdings Act, 1972. No order as to the costs. D R.K.S. Appeal allowed.