N. Bashyam and Another vs The State of Madras and Others

P.S. Kailasam, J.—This petition, is filed by two persons who took on lease an extent of 12.68 acres, for revising the order of the Land

Tribunal (Subordinate Judge), Tiruchirapalli at Pudukottai holding that there was an association of persons and that both the petitioners together

are entitled to cultivate only 5 standard acres. The Authorised Officer (Land Reforms), Tiruchirapalli in his proceedings, dated 27th December,

1965 held that both the cultivating tenants could hold only 5 standard acres and that the excess over 5 acres was the surplus available with them.

He issued a notice in Form 32 for proceeding with the surplus extent available. The tenants took the matter on appeal to the Land Tribunal

(Subordinate Judge), Tiruchirapalli, and the Land Tribunal agreed with the view taken by the Authorised Officer (Land Reforms) and dismissed the

appeal. Hence this revision by the cultivating tenants.

Section 60 of the Madras Land Reforms (Fixation of Ceiling on Land) Act 1961 defines '' cultivating tenant''s ceiling area'' as meaning 5

standard acres held by any person partly as cultivating tenant and partly as owner or wholly as cultivating tenant. Section 3 (10) of the same Act

defines '' cultivating tenant'' as meaning a person who contributes his own physical labour or that of any member of his family in the cultivation of

any land belonging to another, under a tenancy agreement, express or implied, and including any such person, who continues in possession of the

land after the determination of the tenancy agreement, and other persons as provided u/s 3 (10) (ii) of the Act. Section 3 (34) defines '' person''

including any trust, company, family, firm, society or association of individuals, whether incorporated or not. Reading Section 60 along with

Sections 3 (10) and 3 (34) , the purport of the definition of ''cultivating tenants ceiling area '' will have to be determined. Cultivating tenant is

defined as meaning a person, and a person u/s 3 (34) includes an association of individuals. If the two brothers, who have taken on lease the lands,

fall within the scope of the expression "" association of individuals,'' then they will be treated as having come within the definition of'' person '' and

both of them together will be falling within the definition of'' cultivating tenant'' and the cultivating tenant''s ceiling area for a person, that is an

association of persons, will be only 5 standard acres. Mr. Champakesa Ayyangar, the learned Counsel for the petitioners, submitted that a

cultivating tenant as contemplated in Section 60 as well as Section 3 (10) would mean only a tenant and if there are more cultivating tenants than

one, each one of them will be entitled to the ceiling area of 5 standard acres. He referred to the definition of'' cultivating tenant''s ceiling area'' itself,

which means 5 standard acres held by any person partly as cultivating tenant and partly as owner or wholly as cultivating tenant, and contended

that it would indicate that each cultivating tenant would be entitled to hold 5 standard acres and they could not be treated as an association of

persons. Section 3 (42) of the General Clauses Act (Central) defines '' person'' as including any company or association or body of individuals,

whether incorporated or not. Section 3 (22) of the Madras General Clauses Act, 1891, defines '' person '' as including any company or association

of individuals whether incorporated or not. Section 2 (31) of the Income Tax Act, 1931 defines '' person'' as including (i) an individual, (ii) a Hindu

undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local

authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. Section 2 (q) of the Madras Agricultural

Income Tax Act, 1955 defines '' person '' as meaning any individual or association of individuals, owning or holding property for himself or for any

other, or partly for his own benefit and partly for another, etc. Thus it will be seen the expression '' association of individuals '' is used in the several

enactments referred to above. The Supreme Court has construed the scope of the expression '' association of persons '' in three decisions. Dealing

with the definition of '' association of persons '' occurring in Section 3 of the Indian Income Tax Act, in Commissioner of Income Tax, Bombay Vs.

Smt. Indira Balkrishna, , the Supreme Court quoted with approval the decisions in B. N. ELIAS AND OTHERS, IN RE., and

DWARAKANATH HARISCHANDRA PITALE AND ANOTHER Vs. RE., Derbyshire, C.J., pointed out that the word '' association'' means,

according to the Oxford dictionary, "" to join common purpose, or to join in an action "" In COMMISSIONER OF Income Tax, BOMBAY Vs.

LAXMIDAS DEVIDAS AND ANOTHER., AT and be The is to in a of the : that he one which an Supreme Court or on [1937]5ITR584(Bom)

pointed two more persons join purpose common action, occur section imposes tax association must one, object produce income, profits gains. I.

T. Commissioner words out as Commissioner of Income Tax, Bombay North, Kutch and Saurashtra Vs. Indira Balkrishna, , summed up the

position as follows:

There is no formula of universal application as sto what facts, how many of them and of what nature, are necessary to come to a conclusion that

there is an association of persons within the meaning of Section 3; it must depend on the particular facts and circumstances of each case as to

whether the conclusion can be drawn or not.

In Mohamed Noorullah, Representing The Estate of Late Khan Sahib Mohd. Oomer Sahib Vs. The Commissioner of Income Tax, Madras, , the

Court reiterated its view expressed in Commissioner of Income Tax, Bombay North, Kutch and Saurashtra Vs. Indira Balkrishna, . Applying the

test in Commissioner of Income Tax, Bombay North, Kutch and Saurashtra Vs. Indira Balkrishna, , the Supreme Court held that in the case

before it the appellants the co-heirs were rightly assessed as an association of persons and that the co-heirs were sharers, who inherited the

business carried on by one Khan Sahib Mohamed Oomer Sahib. In M.M. Ipoh and Others Vs. Commissioner of Income Tax, Madras, , the

Supreme Court affirmed the view it expressed in Commissioner of Income Tax, Bombay North, Kutch and Saurashtra Vs. Indira Balkrishna, , and

held that a minor also will be a member of an association of persons. The test laid down in the case cited was that an association of persons must

be one in which two or more persons joint in a common purpose or common action. In this case there can be no doubt that the two Petitioners

jointed together for the purpose of taking the property on lease and making profits out of the income from the property. This would, in my opinion,

satisfy the test laid down in Commissioner of Income Tax, Bombay North, Kutch and Saurashtra Vs. Indira Balkrishna, , the fact that they are

brothers will not exclude them from the scope of the definition. It was submitted that the purpose of the legislation will be stultified if both the

tenants are treated as association of persons and the limit is fixed at 5 standard acres. It was strenously contended that if any one of the persons

had been partly cultivating certain extent of land and partly owning some other extent of land, not only he but other persons will be deprived of the

benefit of the Act and the ceiling extent curtailed. There may be some force in this contention but that will not affect the construction to be put on

the words '' association of persons''. Following the decisions cited I agree with the view taken by the Courts below and dismiss the petition with

costs.