Full Judgment Text
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PETITIONER:
PARASHRAM THAKUR DASS & OTHERS
Vs.
RESPONDENT:
RAM CHAND S/O SHRI RADHUMAL & OTHERS
DATE OF JUDGMENT17/02/1982
BENCH:
PATHAK, R.S.
BENCH:
PATHAK, R.S.
REDDY, O. CHINNAPPA (J)
CITATION:
1982 AIR 872 1982 SCR (3) 288
1982 SCC (1) 627 1982 SCALE (1)148
ACT:
Madhya Pradesh Land Revenue Code, 1954 Ss. 149(2) and
164(3) & Madhya Pradesh Land Revenue Code Rules, 1956, Rules
2 to 26.
Allotment of nazul land to displaced persons-
Applications from claimants-State Government initially
deciding not to grant plots-Subsequent decision to allot
plots taken-Plots allotted to some claimants-Claims of other
parties not considered-Such action-Whether valid.
Grant of lease-Hold right in nazul land without
auction-Reasons to be recorded in writing-Whether essential.
HEADNOTE:
Respondents Nos. 1 to 16 applied for the grant of plots
of land for purposes of constructing shops, alleging that
they were displaced persons and entitled to the grant of
plots. The appellants also made a similar application. There
were applications from other claimants. The State Government
acting on the report of the Commissioner rejected all the
applications. Subsequently the Government at the instance of
the appellants who had sought a review, reversed its earlier
order and decided to grant plots on permanent lease to the
appellants. The decision was conveyed in a memorandum by the
State Government, who granted the plots to the appellants as
shop sites in Bhumidhari rights without auction on payment
of premium. The allotment was assailed by the respondents
and they represented to the State Government that only after
further inquiry should the land be reserved for deserving
claimants.
The respondents filed a writ petition in the High Court
challenging the allotment made by the Government in favour
of the appellants contending that no reasonable opportunity
had been given to them to press their claim for grant of
plots, after reversal of the earlier decision not to grant
land, that the appellants had been unduly favoured, and that
the power to grant plots was vested in the Collector and not
in the State Government. The appellants contested alleging
that they had acquired a right to the land that they could
not be divested of those rights. The High Court quashed the
order granting plots to the appellants and directed the
State Government to take appropriate action on the several
claims for allotment of land. It held that under sub-section
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(2) of section 149 read with sub-section (3) of section 164
of the Madhya Pradesh Land Revenue Code, 1954, and rules 22
and 26 framed under the Code it was not open to the State
Government to dispose of the plots without holding a public
auction unless there were reasons recorded in writing for
doing so and that after initially deciding not to
289
grant the plots, the subsequent decision to allot them was
contrary to law as the claims of others had not been
considered.
Dismissing the appeal,
^
HELD :1. The High Court was right in quashing the order
granting plots to the appellants and directing the State
Government to consider the several claims for allotment.
[296 C-D]
2. The grant cannot be attributed to clause (c) of sub-
section (2) of section 149. The land was disposed of in
Bhumidhari right. It was not given on favourable terms to
the appellants, the market value of the plots was taken for
fixing the premium. From the nature of the grant, it was
clear that action under subsection (1) of section 149 was
intended. [293 E]
3. Under Rules 24 to 26 of the Land Revenue Code,
lease-hold rights in nazul land are to be disposed of by
public auction. If in any particular case the State
Government or the Collector considers that there is good
reason for granting the land without auction the reasons
must be recorded in writing. The existence of good reason
for departing from the general principle and the recording
of the reason in writing are essential prerequisites which
must be satisfied before lease hold rights are granted
without auction. [295 A-C]
In the instant case there is no evidence that the State
Government has recorded any reasons in writing for
preferring the mode of disposing of the land without
auction. It had also no good reason for favouring that mode.
In these circumstances the grant of land to the appellants
was rightly quashed by the High Court. [295 E-F]
4. The State Government had decided earlier, as a
matter of policy, not to allot nazul land to displaced
persons, and pursuant to the decision all the applications
for allotment were rejected. The applications were not
rejected on the merits of their respective claims.
Subsequently, when the State Government made an allotment of
the plots to the appellants, it was consequent to a
decision, which must be regarded as a composite of two
decisions, one a policy decision to throw open the land to
allotment in reversal of the earlier policy and, two, to
allot the land to the appellants. The applications of the
respondents for allotment of plots were rejected on the
ground that the land was not available for allotment. That
was a policy decision. When it was reversed it was incumbent
on the State Government to reconsider those applications or
to notify that the land was available for allotment and to
invite fresh applications in that behalf. It was not open to
the State Government to allot the plots to the appellants in
disregard of the claims of others who had also applied for
allotment.[295 G-H; 296 A-B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 440 (N)
of 1970.
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Appeal by special leave from the judgment and order
dated the 18th June 1969 of the Bombay High Court in Misc.
Civil Appln. No. 139 of 1968.
290
Naunit Lal, for the Appellant.
A.G. Ratnaparkhi for Respondents Nos. 1-6.
M.N. Shroff, for Respondents Nos. 17-19.
The Judgment of the Court was delivered by
PATHAK, J. This appeal by special leave is directed
against the judgment of the Nagpur Bench of the Bombay High
Court quashing the grant of Nazul land to the appellants on
a writ petition filed by the respondents Nos. 1 to 16.
The respondents Nos. 1 to 16 applied on March 15, 1963
for the grant of sixteen plots of land included in
Government Nazul Plot No. 31/1 (Sheet No. 49-D) in Yeotmal
Town for the purpose of constructing shops thereon. They
alleged that they had not been allotted any land yet for
carrying on business at Yeotmal, and inasmuch as land sites
were being released to refugees or displaced persons they
claimed that having been compelled to migrate from West
Pakistan to India during the partition of 1947 they were
entitled to the grant of such plots. The appellants made a
similar application on May 16, 1964 and it is their case
that they had also applied earlier in the same behalf on
February 27, 1962. There were applications from other
claimants also. The State Government, acting on the report
of the Commissioner, Nagpur Division, rejected all the
applications. The appellants say that they sought a review
of the order of the Government, and on June 28, 1965 the
Government reversed its order and decided to grant plots on
permanent lease to the appellants. The Collector, Yeotmal
submitted a report to the Government pointing out that each
plot would be 192 sq. ft. in area and having regard to its
market value each allottee should be required to pay a
premium of Rs. 960. The State Government granted the plots
to the appellants as shop sites in Bhumidhari right without
auction on payment of premium, and the decision was conveyed
in a Memorandum dated March 3, 1966. The allotment was
assailed by the respondents, and they represented to the
State Government that after further inquiry the land should
be reserved for deserving claimants.
The respondents filed a writ petition before the Nagpur
Bench of the Bombay High Court challenging allotment made by
the Government in favour of the appellants. They urged that
no reason-
291
able opportunity had been given to them to press their
claims for grant of plots after the Government had reversed
its earlier decision not to grant land, that the appellants
had been unduly favoured and that the order was bad in law
because the plots had been granted without holding an
auction. It was also contended that the power to grant the
plots was vested in the Collector and not the State
Government.
During the pendency of the writ petition a statement
was made on behalf of the State Government that it was
prepared to consider the claims of the respondents. The
appellants, however, maintained that they had acquired a
right to the land in terms of the order dated March 3, 1966
and that they could not be divested of those rights.
By its judgment dated March 14, 1968 the High Court
allowed the writ petition, quashed the order granting plots
to the appellants and directed the State Government and its
officers to take appropriate action on the several claims
for allotment of land. The High Court held that in view of
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sub-s. (2) s. 149 read with sub-s. (3) of s. 164 of the
Madhya Pradesh land Revenue Code, 1954, as applied to the
Vidharba region of Maharashtra, and rules 22 and 26 framed
under the Code, it was not open to the State Government to
dispose of the plots without holding a public auction unless
there were reasons recorded in writing for doing so, and
that after initially deciding not to grant the plots the
subsequent decision to allot them to the appellants was
contrary to law inasmuch as the claims of others had not
been considered.
In this appeal, it is urged by the appellants that the
High Court erred in applying sub-s. (3) of s. 164 and rule
26, and therefore in holding that the lease of the plots
without auction and without recording any reasons was
invalid.
When the Government decided to grant land to the
appellants, it thought that the grant should take the form
of a permanent lease in their favour. The Collector was
requested to frame suitable proposals and to submit them to
the Government. The Collector submitted a report dated
November 23, 1965 suggesting the allotment of plots for the
construction of shops on the footing that each plot would
measure 192 sq. ft. and its market value, worked out on the
basis of recorded sale transactions, and taking into regard
the commercial purpose for which the land was intended,
indicated a premium of Rs. 960. He recommended further that
the plots may
292
be granted without auction and in Bhumidhari right on
payment of premium for constructing shops thereon for
carrying on business. On March 3, 1966 the State Government
made an order accordingly.
Now s. 149 of the Madhya Pradesh Land Revenue Code 1954
provides:
"149. (1) Subject to rules made under this Code,
land belonging to the State Government, not being land
herein after mentioned in sub-section (2), shall be
disposed of in Bhumidhari or Bhumiswami rights by the
Deputy Commissioner who may require payment of a
premium for such right or sell the same by auction.
(2) The land referred to in sub-section (1) shall be
the following, namely:-
(a) land situate in the bed of a river of a tank;
(b) land reserved for communal purposes such as
common grazing ground and cremation grounds;
(c) land given out on favourable terms for the
promotion of religious, charitable,
educational, public or social purposes;
(d) land given out to persons on the condition
that it shall be used only for grazing
cattle;
(e) land given out for temporary purposes or for
limited periods or for mining and purposes
subsidiary thereto or for industrial or
commercial purposes;
(f) land given out to persons on favourable terms
for rendering service as a kotwar;
(g) any other land which the State Government
may, by notification issued in this behalf,
specify."
Section 164 of the Code may also be set forth:
293
"164. (1) Every person who holds land from the State
Government or to whom a right to occupy land is
granted by the State Government or the Deputy
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Commissioner and who is not entitled to hold land
as a tenure-holder shall be called a Government
lessee in respect of such land.
(2) The Government lessee shall, subject to any
express provision in this Code, hold his land in
accordance with the terms and conditions of the
grant which shall be deemed to be a grant within
the meaning of the Government Grants Act, 1895.
(3) The State Government or the Deputy Commissioner
may, subject to rules made under this Code,
dispose of the right to occupy the land specified
in sub-section (2) of section 149 on payment of a
premium or by auction or on such terms and
conditions as may be prescribed."
It is apparent that the grant cannot be attributed to clause
(c) of sub-s. (2) of s. 149. The land was disposed of in
Bhumidhari right. Moreover, it was not given on favourable
terms to the appellants; the market value of the plots was
taken for fixing the premium. From the nature of the grant,
it is clear that action under sub-s. (1) of s. 149 was
intended. Now Part III of the Notification No. 1118-1832-55-
XXVIII dated May 22, 1956 sets forth the rules framed with
reference to sub-section (1) of s. 149. These rules provide
for the grant of Bhumiswami and Bhumidhari rights in nazul
land for dwelling houses and ancillary purposes. Rule 24
defines the expression "Nazul Land" to mean land belonging
to the State Government which is used for building on, or
for roads, markets and other public purposes. Rule 26
applies the provisions of rules 18 to 36 contained in Part V
of the Notification No. 1119-1832-55-XXVIII dated May 22,
1956 to the disposal of nazul land under Part III. The
provise to rule 26 declares that where nazul land is put to
auction it should normally be granted in Bhumiswami right,
and where it is disposed of without auction it should
normally be granted in Bhumidhari right. Rule 22 of Part V
defines the power of the State Government and of the
Collector to dispose of nazul plots with or without auction.
Rule 22 provides:-
294
"22. Power to dispose of nazul plots with or
without auction shall be exercised in accordance with
these Rules-
(1) by the State Government in the case of-
(i) plots of which the freehold market value is
not less than Rs. 5,000;
(ii) plots within the limits of the Municipal
Corporation of the City of Nagpur, whether or
not included in the Schemes of Nagur
Improvement Trust;
(iii) plots reserved for specific purposes under
rule 20;
(iv) strips of land not being independent plots to
be settled with the occupants of adjoining
land where the freehold value of the strip is
not less than Rs. 5,000;
(v) small strips of land adjacent to occupied
plot, which cannot be disposed of as a
separate site and in respect of which there
is a difference of opinion between the
Collector and the Officer-in charge, Town
Planning and Valuation:
(vi) independent plots not included in the
approved lists where there is a difference of
opinion between the Collector and the
Officer-in-charge, Town Planning and
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Valuation;
(vii) plots granted without auction.
(2) by the Collector, in case of the other plots."
Sub-rule (1) of rule 26 in Part V declares:-
"26. (1) Leasehold rights in nazul land shall be disposed
of by public auction except when in any particular
case the State Government or as the case may be,
the Collector thinks for reasons to be recorded in
writing that there is good reason for granting the
land without auction."
295
It seems indisputable that under the Rules as a general
principle leasehold rights in nazul land are to be disposed
of by public auction. If in any particular case the State
Government or, as the case may be, the Collector considers
that there is good reason for granting the land without
auction the reasons must be recorded in writing. The
existence of good reason for departing from the general
principle, and the recording of the reason in writing are
essential prerequisites which must be satisfied before
leasehold rights are granted without auction. It is pointed
out that under clause (vii) of sub-rule (1) of rule 22 the
State Government is empowered to dispose of nazul plots
without auction. We have no doubt it can do so, but only
after full compliance with sub-rule (1) of rule 26. The sub-
rule (1) controls the power of the State Government
conferred by clause (vii) of sub rule (1) of rule 22. To
hold otherwise would be to confer an arbitrary power on the
State Government to dispose of nazul plots. It would be in
the absolute discretion of the State Government to decide
whether nazul plots should be granted with auction or
without auction. If that construction is accepted, it is
clear that sub-rule (1) of rule 26 would be negatived. The
only reasonable construction, it seems to us, is to read the
two provisions together.
In the present case there is no evidence that the State
Government has recorded any reasons in writing for
preferring the mode of disposing of the land without auction
and we are not satisfied that it had good reason for
favouring that mode. In the circumstances the grant of land
to the appellants has been rightly quashed by the High
Court.
There is also sufficient justification in the grievance
of the respondents that the State Government did not
consider the claims of other persons, including the
respondents, when making an allotment of the plots. The
State Government had decided earlier, as a matter of policy,
not to allot nazul land to displaced persons, and pursuant
to that decision all the applications for allotment were
rejected. The applications were not rejected on the merits
of the respective claims set out therein. Subsequently when
the State Government made an allotment of the plots to the
appellants, it was consequent to a decision which
analytically must be regarded as a composite of two
decisions, one, a policy decision to throw open
296
the land to allotment in reversal of the earlier policy and,
two, to allot the land to the appellants. It will be
remembered that the applications of the respondents for
allotment of plots were rejected on the ground that the land
was not available for allotment. That was a policy decision.
When it was reversed, it was incumbent on the State
Government to reconsider those applications or to notify
that the land was available for allotment and to invite
fresh applications in that behalf. It was not open to the
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State Government to allot the plots to the appellants in
disregard of the claims of others who had also applied for
allotment.
In quashing the order granting plots to the appellants
and directing the State Government or its appropriate
officers to consider the several claims for allotment the
High Court, in our opinion, did that which was plainly
right.
The appellants say that the respondents must be taken
to have accepted the rejection of their applications for
allotment, and it was only the appellants who pursued the
matter and obtained a reversal of the order of the
Government and therefore the appellants alone were entitled
to the allotment of plots. The submission would have had
force but for the circumstance that the State Government
effected what was a change of general policy. The change of
policy altered the situation completely, and all the
claimants were entitled to the benefit of that change. By
adopting the new policy, the State Government must be taken
to have declared that the land was now open to allotment to
the claimants who were found most deserving. There were
several applicants for allotment, and a selection had to be
made. It cannot be contended, as indeed it is urged before
us, that the appellants constitute a distinct and separate
class from the respondents only because the appellants
agitated against the rejection of their applications while
the respondents did not.
The controversy which remains is whether it is the
State Government or the Collector who has power to dispose
of the plots in view of their market value. That is a matter
on which we need express no opinion, having regard to the
quashing of the entire allotment proceeding from its
inception. It will be for the Govern-
297
ment or the appropriate authority to decide what should be
the nature of the rights to be conferred on the allottees
and, therefore, what should be the premium to be fixed.
In the result, the appeal is dismissed with costs.
N.V.K. Appeal dismissed.
298