A Tenant Using Land for Petrol Pump Can’t Later Claim It’s Agricultural – Supreme Court Sets Aside Return of Suit Under Order 7 Rule 10 CPC

“Subsequent Declaration of Land as Non-Agricultural Must Be Considered to Avoid Multiplicity of Litigation” –  In a significant judgment clarifying jurisdictional boundaries between civil and revenue courts under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (UPZALR Act), the Supreme Court of India set aside a High Court decision that had ordered return of a civil suit under Order VII Rule 10 CPC, on the ground that the land was agricultural at the time of suit filing.

The Bench of Justices Rajesh Bindal and Manmohan held that the land in question, leased for a petrol pump since 1970, was always used for non-agricultural purposes, and a subsequent declaration under Section 143 of the UPZALR Act, which attained finality during litigation, must be taken into account while adjudicating jurisdiction. The Court ruled:

“Appeals are continuation of proceedings and any developments which may take place during pendency of the appeal or suit, going to the root of the case, can always be taken notice of to avoid multiplicity of litigation.” [Para 15]

The dispute dates back to 1970, when a registered tenancy agreement was executed between Mahesh Chand, the landlord, and the predecessor-in-interest of respondents, leasing the land for setting up an Indian Oil petrol pump at a rent of ₹150 per month.

As the tenants defaulted in rent payments after June 1972, a civil suit was filed in 1974 for eviction and arrears. The trial court rejected a jurisdictional objection raised by the tenants that the land was agricultural and decreed the suit in 1981.

On appeal, the First Appellate Court reversed the trial court, holding that in absence of a Section 143 declaration treating the land as non-agricultural, the civil court had no jurisdiction, and only the revenue court could try the matter. This finding was affirmed by the High Court in 2024, which ordered return of the plaint under Order VII Rule 10 CPC.

The apex court was called upon to decide:

• Whether civil court jurisdiction is barred in light of land’s classification at the time of suit filing.

• Whether subsequent declaration of the land as non-agricultural during litigation under Section 143 of the UPZALR Act should be considered.

• Whether non-registration of that declaration under Section 145 renders it ineffective.

• Whether a tenant using land for commercial purposes can dispute its non-agricultural character.

“Land Used for Petrol Pump Since 1970 Cannot Be Later Claimed as Agricultural”

The Court emphasized that from the very inception, the land was leased “for a commercial and non-agricultural purpose” and the tenant had acted accordingly.

“Since day one, the respondents knew that the land had been taken by them on rent for commercial purpose. They had taken all the permissions from different departments for setting up of a petrol pump.” [Para 8]

It held that the tenants were estopped from later denying the nature of land, just to defeat the rightful claim of the landlord.

Section 143 Declaration Must Be Considered Even If Made During Appeal

Critically, the Court observed that the land had already been declared non-agricultural by the competent authority under Section 143 on 14.03.1986, during the pendency of the first appeal. The Court noted that neither the First Appellate Court nor the High Court considered this significant development: “Without even noticing the factum of the land in question being non-agricultural... the First Appellate Court came to the conclusion that the Civil Court will not have jurisdiction.” [Para 11]

The Court clarified that such subsequent developments go to the root of the matter and must be considered: “Appeal is continuance of proceedings... and developments during pendency, which go to the root of the case, can always be taken note of to avoid multiplicity of litigation.” [Para 15]

No Duty on Landowner to Register Declaration – Section 145 Is Procedural

The respondent-tenant argued that the Section 143 declaration was ineffective as it was not registered under Section 145, but the Court flatly rejected this:

“Section 145... does not cast any duty on the landowner to get it registered. It is the duty of the Assistant Collector... to forward a copy for registration, which is to be made free of cost.” [Para 17]

The Court made it clear that a procedural lapse by public officials cannot defeat the rights of a litigant: “Merely on account of deficiency by the officers, the appellant cannot be deprived of the benefits of the declaration so made.” [Para 17]

High Court’s Jurisdictional Finding and Return of Plaint Set Aside

The High Court had framed five substantial questions of law, but while affirming the lack of jurisdiction, it also overlooked the 1986 declaration that had settled the land’s status as non-agricultural.

The Supreme Court observed that once the land was declared non-agricultural during litigation, revenue courts would no longer have jurisdiction, and civil court’s jurisdiction was properly invoked: “After return of plaint... the Revenue Court will not have the jurisdiction to entertain the lis, as the land has been declared non-agricultural during pendency of the litigation.” [Para 15]

Thus, the order under Order VII Rule 10 CPC was found to be legally unsustainable.

Appeal Allowed, Case Remanded for Merits

Finding serious legal error in ignoring the change of status of the land during litigation, the Supreme Court:

• Allowed the appeal

• Set aside the High Court’s order dated 15.02.2024

• Restored the plaint before the civil court

• Remanded the matter to the First Appellate Court for a decision on merits

• Directed that the case, being over 50 years old, be decided within six months

“Litigation being more than 50 years old, we direct the First Appellate Court to hear and decide the appeal within a period of six months from the date of receipt of this order.” [Para 18]

• Use of land for commercial purposes estops tenant from claiming agricultural status.

• Subsequent declaration under Section 143 must be given effect in pending appeals.

• Non-registration of declaration does not nullify it when the duty lies with the revenue authority.

• Jurisdiction must be tested in light of evolving factual and legal circumstances during pendency of proceedings.

This ruling reinforces that form cannot override substance, and that courts must adopt a pragmatic approach to jurisdiction to avoid needless multiplicity and ensure justice based on real developments, especially in long-pending disputes.

Date of Decision: August 19, 2025