LT. GOVERNOR OF DELHI vs. MATWAL CHAND (D) THR. LRS.

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3971 OF 2006 Lt. Governor of Delhi & Ors. ... Appellant (s) Versus Matwal Chand (D) Thr. LRs. ... Respondent(s) J U D G M E N T RANJAN GOGOI, J. 1. The challenge in this appeal is to an order dated 15.04.2004 passed by the High Court of Delhi in two writ petitions raising identical questions of law on similar facts. JUDGMENT The writ petitions filed by the respondent have been allowed and the acquisition proceedings under the Land Acquisition Act, 1894 (in short ‘the LA Act’) have been declared null and void. Aggrieved, the Delhi Administration has filed the instant appeal. 2. The core facts lie in a short compass and are as follows: The subject land, admittedly, was evacuee property. It was acquired under Section 12 of the Displaced Persons Page 1 2 (Compensation and Rehabilitation) Act, 1954 (in short ‘the DPCR Act’). Thereafter the property was transferred to the compensation pool under Section 14 of the said Act. A

on 6.8.1958 the predecessors of the respondents (hereinafter referred to as the respondents) offered the highest bid which was accepted on 15.10.1958. After adjustment of the verified claims, the respondents were asked to deposit the balance price within 15 days which was so done. On 10.3.1959, the respondents were informed by the appellant that their bid has been accepted and provisional possession of the property is being handed over to them. JUDGMENT 3. On 13.11.1959 a notification under Section 4 of the LA Act was issued proposing to acquire 34070 acres of land in several villages including Village Basai Darapur where the subject land was situated. The notification under Section 4 specifically excluded from the purview of the acquisition Government and evacuee land. After the Section 4 notification was issued and prior to the declaration under Section 6 made on 6.1.1969, the sale certificate was issued in respect of the Page 2 3 subject land on 25.1.1962. The same which was registered on 21.2.1962 clearly recites that the respondents are declared as the purchasers of the property with effect from 25.1.1962.

issued on 10.1.1979. The respondents filed their claim before the competent authority. Thereafter on 7.1.1981 the award in respect of the subject property was passed which came to be challenged in the writ petitions out of which this appeal has arisen. 5. By the impugned order the High Court on consideration of the rival contentions and the provisions of the DPCR Act and the facts set out above came to the conclusion that the JUDGMENT subject land was evacuee property on the date of the notification issued under Section 4 of the LA Act and as the said notification had exempted evacuee land from the purview of acquisition, the proceedings for acquisition, including the award, were null and void. 6. Before us, Ms. Rachana Srivasatava learned counsel for the appellant has urged that the subject property, though evacuee property, ceased to be so upon acquisition of the same Page 3 4 under Section 12 of the DPCR Act. It is urged that under Section 12(2) of the said Act, upon publication of the notification under sub-section (1), the right, title and interest

Government free from all encumbrances. Under sub-section (4) of Section 12 all such evacuee property acquired becomes a part of the compensation pool which vests in the Central Government under Section 14(2) of the DPCR Act. Pointing out the provisions of the Section 20 of the DPCR Act, it is urged that property included in the common pool may be sold, leased, allotted or otherwise transferred to a displaced person. It is therefore urged that upon the acquisition of the subject JUDGMENT property under Section 12 of the DPCR Act the same had shed its character as evacuee property and by operation of the provisions of the Act the property stood vested in the Central Government. The exemption clause contained in the notification under Section 4 of the LA Act issued in the present case on 13.11.1959, in so far as evacuee property is concerned, therefore, has no application to the subject land. Page 4 5 7. It is further argued that though in the present case the sale certificate in respect of the property was issued on 25.1.1962 and the property therein was transferred to the

the respondents on a subsequent date and the acquisition of the property or initiation of such process of acquisition on a prior date. In this regard placing reliance on a judgment of this Court in Saraswati Devi (Dead) by LR vs. Delhi 1 Development Authority & Ors., it is contended that the bid offered by the respondent; the acceptance thereof and the delivery of provisional possession creates an encumbrance on the subject land which is amenable to a process of acquisition JUDGMENT under the LA Act as held in Saraswati Devi (supra). 8. Reliance has also been placed on a judgment of this Court in Delhi Administration & Ors. Vs. Madan Lal 2 Nangia & Ors . to contend that the evacuee property vests in the Custodian for the purposes contemplated by the Administration of Evacuee Property Act, 1950 and in the 1 2013 (3) SCC 571 2 2003 (10) SCC 321 Page 5 6 Central Government only after the notification of acquisition under Section 12 of the DPCR Act is issued but not prior thereto.

evacuee property by the Central Government under Section 12 of the DPCR Act and the transfer of such land to the compensation pool under Section 14 does not divest the status of the subject land as evacuee property. Pointing out the provisions of the two enactments i.e. the DPCR Act and the Administration of Evacuee Property Act, it is contended that while the object and purpose of the latter Act is the administration of evacuee property by the custodian in JUDGMENT accordance with the provisions thereof, acquisition of such property for inclusion in the common pool for allotment of such land to displaced persons is contemplated under the DPCR Act. The transfer of evacuee land to the common pool by issuance of a notification under Section 12 of the DPCR Act does not change the character of the land which continues to remain evacuee property. Hence it is contended that the subject land is covered by the exemption clause of the Section Page 6 7 4 notification dated 13.11.1959. It is also urged that if by virtue of Section 12 of the DPCR Act the property is vested in the Central Government it cannot be understood how the

Act. 10. Learned counsel has further argued that in the present case in terms of the expressed stipulation in the sale certificate dated 25.1.1962 to the said effect, the property stood transferred in the name of the respondents with effect from the said date and not from any anterior date including the date of payment of the full amount due. This is notwithstanding the fact that under Rule 90 of the Rules of JUDGMENT 1955 for sale of properties forming part of the compensation pool, the sale certificate only formalises the transfer which is effective from the date of payment of the full price. Relying on the clear terms embodied in the sale certificate issued in the present case it is argued that the subject land continued to vest in the Central Government until 25.1.1962 and hence could not have been acquired by the notification dated 13.11.1959 under Section 4 of the LA Act, the said date being Page 7 8 anterior to the date of transfer of title in favour of the respondents. 11. Two questions as set out below, in our considered view,

under Section 12 of the DPCR Act, ceased to be evacuee property so as to be excluded from the purview of the notification issued under Section 4 of the LA Act? (ii) If the subject land vested in the Central Government upon publication of the notification under Section 12 of the DPCR Act and thereby ceased to be evacuee land, could such land vested in the Central Government be acquired under the provisions of the JUDGMENT LA Act? 12. A reading of the provisions of the Administration of Evacuee Property Act, 1950 would go to show that the said Act (since repealed with effect from 5.9.2005) had been enacted for the administration of evacuee property and for matters connected therewith. While it will not be necessary to set out the definition of “evacuee” and “evacuee property” as defined in the said Act regard must be had to the provisions of Section 6 which contemplated appointment by the Central Page 8 9 Government by means of a notification in the official gazette, a Custodian for any State for discharge of duties under the Act. Section 7 empowers the Custodian to declare any property as

Under Section 8 any property declared as evacuee property

JUDGMENT (2) Without prejudice to the generality of the provisions contained in sub- section (1), the Custodian may, for any of the purposes aforesaid,-- (a) carry on the business of the evacuee; Page 9 10

Page 10 11

Page 11 12 (q) delegate, by general or special order, all or any of his functions under this Act to such officers or persons as he thinks fit.” 13. On the other hand, the DPCR Act has been enacted, inter

rehabilitation grants to displaced persons. Section 12 contained in Chapter III of the DPCR Act confers power in the Central Government to acquire evacuee property for rehabilitation of displaced persons. The provisions of Sections 12, 14 and 20 which are relevant have already been noticed and will not require any further mention. The effect and interplay between the two enactments have been noticed in Delhi Administration & Ors. vs. Madan Lal Nangia & Ors. (supra) wherein it has been held that under the JUDGMENT Administration of Evacuee Property Act, 1950, the evacuee property vests in the Custodian for purposes of administration of such property in accordance with the provisions of the Act and at that stage the property does not vest in the Central Government. However, after the issuance of the notification under Section 12 of the DPCR Act the property vests in the Central Government. This is, in fact, abundantly clear from the provisions of Section 12(2) of the DPCR Act which clearly Page 12 13 provides that on publication of a notification under sub-section (1) of Section 12 “the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published be extinguished and the evacuee property shall vest absolutely in the Central Government free from all encumbrances.” Under sub-section (4) of Section 12 all such evacuee property acquired forms part of the compensation pool which under Section 14 vests in the Central Government “free from all encumbrances and shall be utilised in accordance with the provisions of this Act and the rules made thereunder”. The vesting of the property in the Custodian under the Administration of Evacuee Property Act JUDGMENT (Section 8) and in the Central Government (after issuance of Section 12 notification under the DPCR Act) are two distinct and different phases which are contemplated to be brought into effect by specific acts and conscious decisions as contemplated by the provisions of the two enactments. The clear language of Section 8 of Administration of Evacuee Property Act and Sections 12(2) & (4) and 14 of the DPCR Act makes it abundantly clear that the transition from the vesting Page 13 14 of the evacuee property in the Custodian to the Central Government is a distinct and identifiable process under the law. The acquisition of the land under Section 12 of the DPCR

Specifically, once the property is included in the common pool and vests in the Central Government, under Section 16 of the DPCR Act, the Central Government may take such measures as it considers necessary or expedient for the custody, management and disposal of such property including transfer of the property out of the compensation pool to a displaced person. In the face of the clear provisions of the two enactments and the respective schemes contemplated JUDGMENT thereunder, it is difficult to hold that the evacuee property continues to retain such status after issuance of the notification under Section 12 of the DPCR Act. In fact the above view would find resonance in an old vintage decision in Major Gopal Singh and Others vs. Custodian, Evacuee 3 Property, Punjab an Others though rendered in a somewhat different context. The relevant details thereof in para 9 may be extracted below. 3 AIR 1961 SC 1320 Page 14 15

Page 15 16

14. In view of the above it has to be held that the subject land ceased to be evacuee property after publication of the notification of acquisition under Section 12 of the DPCR Act. Consequently the exemption clause in the notification issued Page 16 17 under Section 4 exempting from its purview evacuee land will have no application to the present case. 15. This will bring us to the second question that has been

regard to the effect of delivery of provisional possession, which in the present case was handed over to the respondents on approval of the highest bid, it was held that such provisional possession gives the auction purchaser possessory rights as distinguished from proprietary rights in the auctioned property. The above proposition culled out in a judgment of the Punjab High Court in Roshan Lal Goswami vs. Gobind 4 Raj was approved by this Court to further hold that such JUDGMENT proprietary rights occasioned by the delivery of provisional possession creates an encumbrance on the property which can be the subject of acquisition under the LA Act. In the present case also the facts being identical, we have to hold that an encumbrance had been created in the subject property, which, as held in Saraswati Devi (supra), could be acquired under the LA Act although the ownership in the land vested in the Central Government. In this regard we must also 4 AIR 1963 Punj 532 Page 17 18 take note of the manner in which the earlier decision of this 5 Court in Sharda Devi vs. State of Bihar has been understood in Saraswati Devi (supra), namely, it is only such

encumbrances which would be outside the purview of the LA Act. 16. In view of the above discussions we arrive at the conclusion that the judgment and order of the High Court under challenge in the present appeal is not sustainable in law. We, therefore, set aside the same and allow this appeal. ..……..……......................J. (RANJAN GOGOI) JUDGMENT ….……..…….....................J. (PRAFULLA C. PANT) NEW DELHI SEPTEMBER 04, 2015. 5 2003 (3) SCC 128 Page 18 1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION I.A. NO. 12 OF 2015 IN CIVIL APPEAL NO. 3971 OF 2006 Lt. Governor of Delhi & Ors. ...Appellant (s)/ Non-Applicants Versus Matwal Chand (D) Thr. LRs. ...Respondent/(s) Applicant(s) O R D E R This application seeks directions that the subject land acquisition proceedings are deemed to have lapsed under Section 24(2) of the Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. JUDGMENT In view of the issues raised and the consistent orders of this Court on similar applications, we leave it open to the respondents to approach the appropriate forum, if they are so advised, to initiate appropriate proceedings under Section 24 of the Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Any such approach, if made, shall be within eight weeks from today. Page 19 2 The I.A. stands disposed of in the above terms. ...……..……......................J. (RANJAN GOGOI) ….……..…….....................J. (PRAFULLA C. PANT) NEW DELHI SEPTEMBER 04, 2015. JUDGMENT Page 20