State ordered to pay acquisition-equivalent restitution with 9% interest after selling land already restored to its original owners

Sohan Singh, a displaced person, successfully bid at a statutory auction conducted by the Ministry of Rehabilitation on 17 December 1960 for, inter alia, Khasra No. 387/311, measuring 4 bighas and 14 biswas. The consideration of ₹1,375 was adjusted against his verified compensation claim, and a Sale Certificate issued in 1963 declared him purchaser with effect from 9 June 1962.

However, the land had already been restored to the recorded owners by the Authorised Deputy Custodian’s order dated 30 December 1961, following an inquiry into their status and possession.

Despite the restoration, Sohan Singh’s name, and later that of his son Harbir Singh Sawhney, was entered in the revenue records.

The land was acquired in 1998 for the Noida Toll Bridge. Although acquisition notices were issued to Harbir Singh, compensation was ultimately paid in 2003 to the persons claiming under the restoration order.

In earlier writ proceedings, the Land Acquisition Department represented that the compensation would be recalled and the competing claims referred under Section 30 of the Land Acquisition Act, 1894; the petition was withdrawn on that basis. The proposed reference was never completed.

In 2014, the Chief Settlement Commissioner acknowledged that the Sale Certificate had been issued in error after restoration of the land, but rejected consequential relief on the ground that disputed questions of fact were involved. Harbir Singh thereafter pursued the present writ petition, which was continued by his legal representative after his death.

Whether the Petitioner could claim ownership of Khasra No. 387/311, or the acquisition compensation relating to it, on the basis of the 1960 auction and the subsequent Sale Certificate despite the prior restoration order dated 30 December 1961?

Whether the earlier writ proceedings, including the Petitioner’s withdrawal based on the Department’s undertaking to recall the compensation and initiate a Section 30 reference, barred or affected the present claim?

Whether the Government’s statutory auction, adjustment of consideration and issuance of a Sale Certificate for land already restored gave rise to an enforceable claim for restitution against the State?

What should be the appropriate measure and form of relief—alternative land, present market value, refund with interest, or monetary restitution linked to the acquisition compensation?

The Court applied Sections 8 and 20 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, under which compensation could be satisfied through sale of property from the compensation pool and the competent authority could transfer such property by auction.

Section 20A, read with Section 16 of the Administration of Evacuee Property Act, 1950, recognised that where restoration was impracticable because the property had been transferred, an equivalent property or monetary substitute could be provided to the restoration claimant, although it did not create a statutory right to alternative land for every failed auction purchaser.

Under Rule 90 of the 1955 Rules, a bid did not itself complete the sale; title passed only upon approval and payment or adjustment of the full consideration, with the Sale Certificate serving as formal evidence of the completed transfer.

Relying on Bishan Paul v. Mothu Ram, AIR 1965 SC 1994, and Saraswati Devi v. Delhi Development Authority, (2013) 3 SCC 571, the Court held that ownership passes upon completion of the statutory sale, not merely upon acceptance of the highest bid.

The Court further relied on Abdul Qadir v. Managing Officer-cum-Assistant Custodian of Evacuee Property, (1980) 1 SCC 146, concerning substitution or compensation where restoration conflicts with a prior transfer; Union of India v. Qayyum Khan, 2009 SCC OnLine Del 839, concerning moulding of restitutive relief where inconsistent State action prejudices an innocent person; Kavita Trehan v. Balsara Hygiene Products Ltd., (1994) 5 SCC 380, recognising restitution as an inherent judicial power; and ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., (2004) 3 SCC 553, confirming that monetary relief may be granted in a writ petition where the claim arises from an admitted public-law wrong.

Mutation entries do not create title, and Section 30 of the Land Acquisition Act, 1894, addresses apportionment of compensation but does not exhaust the State’s independent restitutive liability.

The Court held that the auction bid did not, by itself, transfer title. The Sale Certificate specified 9 June 1962 as the effective date of purchase, and no contemporaneous material established that the sale had become absolute before the restoration order of 30 December 1961.

Consequently, when the sale became effective, Khasra No. 387/311 had already ceased to be part of the compensation pool and had been restored by the competent authority; the Sale Certificate could not convey title to property that was no longer available for transfer.

The subsequent mutation entries and acquisition notices could not cure the absence of title or amount to an adjudication that the Petitioner owned the land.

Nevertheless, the Court found that the Government had committed an admitted administrative error. It had auctioned the land, adjusted the consideration against Sohan Singh’s verified claim, issued a formal Sale Certificate, maintained the mutation entries and later treated the Petitioner as a person interested in the acquisition proceedings.

Since the Petitioner was not shown to have caused or known of the administrative failure, leaving him without the land or any meaningful equivalent would unjustly place the entire burden of the State’s mistake upon him.

The earlier withdrawal of the writ petition did not bar relief because it was based on the Department’s representation that the compensation would be recalled and the dispute referred under Section 30; that process was never completed, and the earlier orders did not decide title or substantive entitlement.

The Court declined alternative land or present market value because no statutory entitlement to substitute land existed for the Petitioner and, had the sale been valid, the land would in any event have been acquired in 1998. The appropriate restitutive measure was therefore the actual acquisition compensation disbursed for the same land, including its statutory components, rather than the nominal 1960 consideration.

However, the State was held liable to provide independent monetary restitution for having issued a Sale Certificate for land already restored.

The Land Acquisition Collector was directed to compute, within four weeks, the total amount disbursed under Award No. 6/1999–2000 for the land and the dates of disbursement.

Respondent Nos. 1 and 3 were directed to pay the Petitioner’s estate an equivalent amount, together with simple interest at 9% per annum from the respective dates of disbursement until payment, within twelve weeks.

The rate would increase to 12% per annum after expiry of that period until actual payment.

No separate refund of the auction consideration or allotment of alternative land was granted, and the estate was awarded costs of ₹50,000.