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The first respondent applied to the Deputy Commissioner, Lakhimpur for settlement of a Tea Garden for "special cultivation of tea". In March, 1964 the Government of Assam permitted the settlement on payment of Rs. 3.86 lakhs as premium. Upon the respondent failing to make payment of the amount, the State Government directed the auction of the tea garden. The first respondent thereafter moved a petition in the High Court for a declaration inter alia that the State Government had acted illegally in fixing the amount of premium. The High Court allowed the petition holding that the order fixing the premium was not in conformity with rule 40 framed under the Assam Land Revenue Regulations which required the State Government to fix the rate of premium for a particular locality; it did not empower the Government to fix the premium payable by an intending holder in a particular case. On appeal to this Court,
HELD : The High Court was in error in setting aside the order passed by the Government of Assam and indeclaring that the offer to settle the tea garden on payment of the amount specified Rs. 3,86,000 was not in conformity with rule 40.
There was no warrant for the assumption made by the _High Court that in settling the premium to be fixed in respect of its own property, the Government is bound to fix the premium generally in respect of a region. The Government is by the Act or the Rules not disqualified from fixing the premium to be paid in respect of an individual tea garden. In the absence of any indication to the contrary a tea garden may appropriately be regarded as a locality within the meaning of Rule 40. The rate of premium may be fixed by the State Government according to its commercial value.
307 The Judgment of the Court was delivered by shah, C. J. On October 24, 1957 Rameshwar Agarwalahereinafter called the respondent applied to the Deputy Commissioner, Lakhimpur, for settlement of a tea garden for "special cultivation of tea". By order dated March 11, 1964 the Government of Assam permitted settlement of the tea garden for special tea cultivation on payment. The respondent failed to pay the amount demanded. The State of Assam then put up the tea garden for auction. The respondent moved a petition in the High Court of Assam for an order declaring that in fixing the amount of the premium at Rs. 3,86,008/the State acted illegally, and that the order was void and unenforceable at law because in fixing the amount of thepremium the State acted without jurisdiction and the order directing auction of the tea garden for not depositing the amount demanded was also illegal. The High Court, upheld the contention and ordered the State of Assam not to, give effect to the order dated March 31, 1964 calling upon the respondent to pay the amount due within two months of the order and the order dated November 26, 1964 directing that the tea garden be put up for auction. With certificate granted by the High Court, the State of Assam has appealed .to this Court.