Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6
PETITIONER:
UNION OF INDIA & ANR.
Vs.
RESPONDENT:
M/S MUNDRA SALT & CHEMICAL INDUSTRIES & ORS.
DATE OF JUDGMENT: 14/11/2000
BENCH:
Ruma pal, A.P.Misra
JUDGMENT:
J U DG M E N T
MISRA, J.
L.....I.........T.......T.......T.......T.......T.......T..J
The present appeals are directed against the judgment
and order of the High Court dismissing the appellants
appeal, challenging the order of the District Judge holding
that the respondents are owners of the suit land and the
grant made by the Government in their favour was in fact a
sale and not merely lease or licence to manufacture salt on
the suit land. The question raised in these appeals is:
who is the owner of the suit land, whether the appellant
Union of India or the State Government? This is raised in
the land acquisition proceeding, in the context of
adjudication of the apportionment of the compensation. In
order to appreciate the controversy it is necessary to give
certain facts.
On 22nd May, 1952 Tehsildar issued a notification for
sale of Khajan (Marshy) land on ownership basis through
public auction. In the public auction dated 12th June, 1952
Hanumanbux Lalchand Mundra offered highest bid and deposited
the part amount on the same day towards the price of land.
The balance amount was deposited on 26th June, 1952. On 5th
May, 1955 the Collector confirmed the said auction sale. As
a consequence, on 25th May, 1955 an agreement was executed
with the said purchaser and on 24th November, 1955 the
Circle Officer handed over the possession of the land.
Through mutation Entry No. 227 dated 24th February, 1970
the names of all the partners of Respondent No. 1 were
entered in the revenue records. In the land acquisition
proceedings for the construction of highway a portion of
land bearing Sl. No. 386 (p) Mulund through the award,
ownership of Respondent No. 1 was recognised and
compensation was held to be payable to the said Hanumanbux
Lalchand Mundra. The Municipal Corporation of Greater
Bombay also acquired a portion of the land purchased in
public auction held on 12th June, 1952 and through an award
dated 13th April, 1972 accepted the title of the respondents
and paid compensation to the partners of the Respondents. A
notification under Section 4 of the Land Acquisition Act,
1894 read with Section 128 of the Maharashtra Regional and
Town Planning Act, 1966 (hereinafter referred to as the
said Act) was issued by the Government of Maharashtra for
acquiring land measuring 32,506 Sq. Mtrs. Out of Gat. No.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6
86 (p). A notification dated 11th November, 1980 under
Section 126 of the said Act read with Section 6 of the Land
Acquisition Act, 1894 was issued. The respondents
challenged these notifications through a writ petition, in
which respondents agreed to hand over possession of the
aforesaid area. The respondents accordingly handed over
possession of the said area and submitted their claim for
compensation.
It is at this stage, the Salt Department of the Union
of India challenged the ownership of the respondents in
respect of this acquired land. The Land Acquisition Officer
referred the matter of ownership to the Collector who held
respondents to be the owners. However, on 19th September,
1986 the Collector in review proceedings held, Union of
India to be the owner and respondents were only the lessees
who were entitled to receive compensation only for the loss
of their business. The respondents challenged this order
through a writ petition. The High Court quashed the
aforesaid order and directed the District Judge to decide
this question of ownership of land in pending Land
Acquisition Ref. No. 90 and 91 of 1986. In this, only
Union of India and not the Government of Maharashtra filed
written statement. The aforesaid references of the
respondent were allowed. The Court held that respondents
were the owners and were entitled for the compensation
calculated at the market value of Rs. 80/- per sq. mtr.
Aggrieved by this the appellants filed the first appeal
before the High Court, which was also dismissed. The High
Court confirmed respondents to be owners of the acquired
land. However, the rate of compensation was reduced from
Rs. 80/- per sq. mtr. to Rs. 70/- per sq. mtr. The
High Court held, that Section 37 of the Bombay Land Revenue
Code of 1879 (hereinafter referred to as the 1879 Code) on
which strong reliance was placed, cannot confer title on the
appellants.
Learned senior counsel for the appellants Mr. Mukul
Rohtagi, Addl. Solicitor General, submits with vehemence
that High Court fell into error in not applying Section 37
of the 1879 Code. The submission is, application of this
Section clearly recognises title of the Union hence any
finding to the contrary is liable to be set aside. He also
referred to the proclamation issued for selling the land on
ownership basis through public auction including the
agreement of sale to show the land which was given to the
respondents was not to confer any ownership but at best
confer right as a lessee or licensee. He also relied on the
aforesaid order of the Collector, wherein the appellant was
held to be the owner of the land in question. He also
referred to the licence issued under the Central Excise and
Salt Act, 1944.
On the other hand, learned senior counsel for the
respondents Mr. Gopal Subramaniam submits, High Court
findings require no interference. It is rightly concluded
Section 37 will have not application. Further, Article 294
of the Constitution of India read with Section 99 and 100
and legislative entries under the Government of India Act,
1935 makes the legal position clear that it is not the Union
but the State Government which is the owner of the suit
land.
The main thrust of argument on behalf of the
appellants is with reference to Section 37 of 1879 Code,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6
which is quoted hereunder:-
Section 37 (1): All public roads, lanes and paths,
the bridges, ditches, dikes, and fences, on, or beside, the
same, the bad of the sea and of harbours and creeks below
high-water-mark, and of rivers, streams, nallas, lakes, and
tanks, and all canals, and water-courses, and all standing
and flowing water, and all lands wherever situated, which
are not the property of individuals, or of aggregates of
persons legally capable of holding property, and except in
so far as any rights of such persons may be established, in
or over the same, and except as may be otherwise provided in
any law for the time being in force are and are hereby
declared to be, with all rights in or over the same, or
appertaining thereto, the property of the Crown and it shall
be lawful for the Collector, subject to the orders of the
Commissioner, to dispose of them in such manner as he may
deem fit, or as may be authorized by general rules
sanctioned by the Government concerned, subject always to
the rights of way, and all other rights of the public or of
individuals legally subsisting.
Explanation In this section high-water-mark means
the highest point reached by ordinary spring-tides at any
season of the year.
(2) Where any property or any right in or over any
property is claimed by or on behalf the Crown or by any
person as against the Crown, it shall be lawful for the
Collector or a survey officer, after formal inquiry of which
due notice has been given, to pass an order deciding the
claim.
(3) Any suit instituted in any Civil Court after the
expiration of one year from the date of any order passed
under sub-section (1) or sub-section (2), or, if one or more
appeals have been made against such order within the period
of limitation, then from the date of any order passed by the
final appellate authority, as determined according to
section 204, shall be dismissed (although limitation has not
been set up as a defence) if the suit is brought to set
aside such order or if the relief claimed is inconsistent
with such order, provided that in the case of an order under
sub-section (2) the plaintiff has had due notice of such
order.
(4) Any person shall be deemed to have had due notice
of an inquiry or order under this section if notice thereof
has been given in accordance with rules made in this behalf
by the Provincial Government. {Emphasis supplied}
The empahsis is that this section makes all public
roads, lanes, paths, the bridges, ditches, dikes,..bed of
the sea, harbours and creeks below high-water-mark..and all
lands wherever situated, which are not the property of
individuals are declared to be the property of the Crown.
The use of the words all lands wherever situated is
comprehensive to include all lands which would include the
suit land and the Crown referred to in the Section, at the
relevant time, refers to the Crown of England which could
only be the Central Government now and it by no stretch of
imagination would mean the Provincial Government.
Having considered the submission of the parties,
before considering Article 294 of the Constitution, it is
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6
necessary to refer to the preceding legislative history, in
relation to the ownership of the land which has some
relevance for the consideration of the ownership in
question, whether it is the Union or the Provincial
Government which is the owner of the land.
The first legislation in this regard is Regulation
No.1 of 1799. This was enacted to constitute a regular code
or regulations for the internal Government management of the
British territories under the Presidency of Bombay. This
regulation prescribes the manner and method of making the
rule or passing the orders, in respect of the rights and
tenures of the cultivators of the soil. Then came the
Regulation No. 1 of 1808, which. records that the island
of Salsette was conquered by the Portuguese in 1584,
thereafter it was parcelled out among the European subjects
into village allotments for a very small (or) fixed rent.
The lands were subject to grants either from the Mohammedan
rulers, the Peshwas or the Portuguese. After the annexation
of Salsette by the East India Company sometime in 1774, the
question arose, whether the properties in the salt vested in
the company or the occupants, as salt was cultivated both on
the land of the Government as also on the land purchased by
the natives from the Portuguese. Under this regulation,
Governor General in Council recognised the right of the
occupants of the soil by charging moderate and fixed rent
from them. This regulation records, after 1801, when deeds
were introduced as evidence of the grants of rights to the
occupants, various persons, some of whom named in the
Regulation, accepted the deeds. Next came Regulation IX of
1827 which obligated the authorities to maintain a register
of title deeds. It was done as it was thought to be
conducive to the security of titles of the immovable
properties, which also greatly facilitated the transfer of
such properties through sale, gift, mortgage etc.. This
register of title deeds was established in each Zilla
(District). Under Section VI Clause 1st , every deed or
other writing, transferring or mortgaging immovable
properties, situated within the Zilla, if registered in this
Register of title deeds, shall without regard to the date of
its execution, if proved to be valid, be preferred to,
either subsequently registered or not registered at all but
this preference was extended only to the immovable
properties. Thus, came the aforesaid 1879 code followed by
the Record of Rights Act, 1903 which required the detailed
enquiry before recording the creating of any right in any
person.
Similarly, with reference to the Regulation of Salt
Manufacture, the Salt Act, 1837 was enacted under which no
salt could be manufactured on any land without express
permission. Then came the Salt Act, 1850 under which
detailed provision was made to levy duties of custom and
excise on the manufacture of salt. In fact, the Land
Revenue Code Rules, 1905 was made under Section 214 of the
aforesaid 1879 Code.
The legal position which emerges from the aforesaid
laws appears to be that unless an individual proves his
claim and title over the land, where the salt work is being
carried on, such land was deemed to be that of the
Government. It is in these set of laws, Section 37 of the
1879 Code also projects itself in the same manner. Under
it, if any individual fails to establish his title, the
Union Government is presumed to be the owner of the land.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6
However, we have to keep in mind, when 1879 Code was
promulgated federalism was not even born. In other words,
then there was no question of any right of two Governments
to hold the properties between them as it is now between the
Union and the State Governments. Then the right over the
land was confined to that of the Crown and an individual.
That is why Section 37 of the 1879 Code recognises
preemptory right of the Crown in respect all lands which are
not the property of individuals. This conception of
exclusive ownership over all land by the Crown stood
dissolved after coming into force of the Constitution of
India, under which right over such land was conferred both
on the Union and the State Governments.
In order to adjudicate the controversy in this case it
is necessary to refer to Article 294 of the Constitution of
India, which is quoted hereunder:
294. Succession to property, assets, rights,
liabilities and obligations in certain cases As from the
commencement of this Constitution
(a) all property and assets which immediately before
such commencement were vested in His Majesty for the
purposes of the Government of Dominion of India and all
property and assets which immediately before such
commencement were vested in His Majesty for the purposes of
the Government of each Governors Province shall vest
respectively in the Union and the corresponding State, and
(b) all rights, liabilities and obligations of the
Government of the Dominion of India and of the Government of
each Governors Province, whether arising out of any
contract or otherwise, shall be the rights, liabilities and
obligations respectively of the Government of India and the
Government of each corresponding State,
subject to any adjustment made or to be made by reason
of the creation before the commencement of this Constitution
of the Dominion of Pakistan or of the Provinces of West
Bengal, East Bengal, West Punjab and East Punjab.
This Article declares which property would vest in the
Union and which would vest in the State Government. Under
it, all properties immediately before the commencement of
the Constitution which vested in His Majesty for the
purposes of the Government of Dominion of India vests in the
Union and all properties which vested in His Majesty for the
purposes of the Government of each Governors Province vests
in the corresponding State and all rights, liabilities and
obligations of the Government of Dominion of India and of
the Government of each Governors Province are recognised to
be the rights, liabilities and obligations respectively of
the Government of India and the Government of each
corresponding State. So under this Article ownership
question between the Union and the State Government is to be
tested and not under obsolete Section 37 of 1879 Code.
Faced with this, Mr. Rohtagi submits this vesting in favour
of the State could only be, if before the commencement of
the Constitution the land was used for the purposes of
Government of Governors Province. We have already referred
to the historical background as to how first rights of
individual were recognised. Thereafter a register was
brought into the picture for recording the names of such
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6
owners including occupancy right holders and later land
revenue was charged from such holders of such land by the
Government of the Province, the administration and control
of which was with the Government of Provinces except when
licences were issued by the Union under the relevant Salt
Act. This position becomes more clear, after coming into
force of the Government of India Act 1935. The 1935 Act for
the first time effectively demarcated the legislative powers
of the federal legislation and the provincial legislation.
Sections 99 and 100 of this Act define fields of legislation
read with three lists contained in the Seventh Schedule.
The land under Entry 21 and land revenue under Entry 39
fell under the provincial list. When the Constitution of
India came into force, we find similar entries of the land
under Entry 18 and land revenue under Entry 45 of List II
of the Seventh Schedule. This leaves no doubt that both
land and land revenue fell under State List and was
governed by the State even prior to the coming into force of
the Constitution of India.
The question of title of the Union in the proceedings
under the Land Acquisition Act, which is under
consideration, admittedly is after the enforcement of the
Constitution of India hence the title over the land in
question could not be that of the Union of India.
Lastly, learned counsel for the Union submits that
significantly the very High Court in another set of contest,
which is subject matter of consideration in Civil Appeal
Nos. 2286-2343 of 1998 has held, Union of India to be the
owner over such land. We have perused the said judgment, we
find, the High Court merely relies for drawing such
inference on Section 37 of 1879 Code. We have already held
after Government of India Act, 1935, in any case after the
Constitution of India, Section 37 of the 1879 Code would
have no application for the claim by the Union. Hence this
submission has no merit. Hence we do not find any
sustainable submission to hold Union of India to be the
owner of the suit land. Consequently, we find no error in
the impugned judgment of the High Court.
For all the aforesaid reasons, we do not find any
merit in the present appeals. Accordingly, the same are
dismissed with costs.