TMI Blog2013 (1) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... e above property was an evacuee property which was acquired by the central government Under Section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (for short, '1954 Act'). On acquisition of that property Under Section 12, it became part of the compensation pool Under Section 14. By exercise of the power conferred Under Section 20, the above property was notified to be sold by way of public auction on 21.06.1958. 3. Dev Prakash Jagwani, the Appellant's husband being a displaced person participated in the public auction for the sale of above property. His bid of Rs. 24,500/- which was the highest bid was accepted. 4. On 31.10.1960, the office of the Assistant Settlement Commissioner (Rural), Ministry of Rehabilitation intimated to the Appellant's husband that it has been decided to give him provisional possession of the auctioned property subject to the terms and conditions stipulated in the indemnity bond and the special affidavit already executed by him. He was also informed that the issue of the above intimation did not constitute transfer of complete title in the property until the final letter of adjustment of compensation was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said land could not have been acquired under the LA Act. 10. DDA was not impleaded as party Respondent initially but later on it was impleaded as Respondent No. 4 in the writ petition. DDA filed its written response in opposition to the writ petition and raised the plea of delay and laches. In its reply, DDA submitted that the physical vacant possession of the land was taken on 11.07.1962 after the award was passed on 30.06.1962 and the subject land was placed at its disposal on 09.02.1981. It was also submitted by DDA that though the property was conveyed to the Petitioner (Appellant herein) on 22.08.1980 but she was declared purchaser of the said property with effect from 11.12.1960 and, thus, the subject land ceased to be government land with effect from 11.12.1960 and whatever rights the Appellant had could be acquired under the LA Act. 11. In light of the rival position set up by the parties, the Single Judge framed two questions for consideration: (i) Whether the land in question was an evacuee land on the date of issue of Notification Under Section 4 of the LA Act on 07.03.1962? (ii) Whether the land, if it was an evacuee property, could have been acquired un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Respondent No. 1 on the ground that the explanation given by the Appellant for delay in filing of the present appeal is unsatisfactory. We have given our anxious consideration to this aspect relating to condonation of delay. While considering the delay on the part of the Appellant in filing of the present appeal, we have also taken into account the delay of more than 31 years on the part of Respondent No. 1 in challenging the acquisition proceedings by way of writ petition in which the impugned order which is the subject matter or challenge in this appeal has been opposed. We are of the view that since the question in the present proceedings relates to valuable rights of the parties in the land in question, the delay on the part of either of the parties cannot be allowed to come in the way of doing justice. We are further of the view that when substantial justice and technical consideration are pitted against each other, cause of substantial justice deserves to be preferred. We feel that by delay, the Appellant would not stand to gain anything and at best he would only be entitled to get his claim adjudicated on merits instead of it being thrown to winds on technical consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our holding so is that the property on being put to auction on 28.12.1960, the Petitioner was declared to be the highest bidder against his verified claims of the property left behind in Pakistan the verified claims were surrendered by him as a part of consideration for purchase of the property in question in public auction. The balance consideration was paid in cash. The entire consideration stood paid by 14.11.1961. The right of the Petitioner in the property on being declared to the highest bidder was a valuable right, which the Petitioner could enforce against the Respondents in compelling the Respondent to transfer the property in his name. Such a right could be acquired. The property on being put to auction and on the Petitioner being declared to be the highest bidder and on receipt of entire sale consideration went out of compensation pool. The Petitioner alone had interest in the property. This interest could definitely be acquired pursuant to the notification issued Under Section 4 of the Act. Therefore, it cannot be said that the notification Under Section 4 of the Act was non est. It was for the Petitioner to have raised a claim. Proceedings for acquisition thus cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions of the Punjab High Court in Roshan Lal Goswami v. Gobind Raj and Ors. AIR (1963) Punjab 532 and Jaimal Singh, S/o. Jawahar Singh and Anr. v. Smt. Gini Devi AIR (1964) Punjab 99 and the decisions of this Court in Bombay Salt and Chemical Industries v. L.J. Johnson and Ors. AIR 1958 SC 289, Bishan Paul AIR 1965 SC 1994, Dr. Bhargava and Co. and Anr. v. Shyam Sunder Seth by L.Rs. (1994) 5 SCC 471 and Hans Raj Banga v. Ram Chander Aggarwal (2005) 4 SCC 572. 17. Mr. Ranjit Kumar heavily relied upon the decision of this Court in Sharda Devi v. State of Bihar and Anr. (2003) 3 SCC 128 in support of his argument that so long as title vests with the central government, the land cannot be acquired under the LA Act. He argued that under the LA Act, the acquisition is of land and not the 'rights in the land' which are not even absolute and which are subject to certain obligations. 18. Mr. P.P. Malhotra, learned Additional Solicitor General and Mr. Amarendra Sharan, learned senior Counsel for DDA conversely not only supported the final conclusion of the Division Bench in upsetting the judgment of the Single Judge but also vehemently argued that writ petition filed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmend to us but we do not intend to disturb the finding of the Division Bench on this aspect in view of the appropriate final conclusion in the matter. 24. The principal contention on behalf of the Appellant raised before us (which was also argued before the Single Judge and the Division Bench of the High Court.) is that on the date of the acquisition, the subject property vested in the central government having been acquired Under Section 12 of the 1954 Act; the title in that land did not transfer in favour of the Appellant's husband despite public auction conducted on 21.06.1958 and the approval of the highest bid given by the Appellant's husband on 31.10.1960, as the full price had only been paid in 1980 by the Appellant (her husband had died in the meanwhile), and, therefore, acquisition of the subject land in 1962 under the LA Act at the instance of the Delhi Administration was bad in law. In this regard, heavy reliance has been placed on behalf of the Appellant upon the decision of this Court in Sharda Devi (2003) 3 SCC 128, We shall first refer to the decision of this Court in Sharda Devi (2003) 3 SCC 128. 25. In Sharda Devi (2003) 3 SCC 128, this Court was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquires lands under the provisions of the Land Acquisition Act, it must be for a public purpose, and with a view to put them to that purpose, the Government acquires the sum total of ail private interests subsisting in them. If the Government has itself an interest in the land, it has only to acquire the other interests outstanding thereof so that it might be in a position to pass it on absolutely for public user. An interesting argument was advanced before the Supreme Court. It was submitted that the right of the Government to levy Assessment on the lands is an encumbrance and that encumbrance is capable of acquisition. The Court held that the word encumbrance as occurring in Section 16 can only mean interests in respect of which a compensation was made Under Section 11 or could have been claimed. It cannot include the right of the Government to levy Assessment on the lands. The Act does not contemplate the interest of the Government in any land being valued or compensation being awarded therefor. 29. In Secy. of State v. Sri Narain Khanna [AIR 1942 PC 35 : 44 Bom. LR 788] it was held that where the Government acquires any property consisting of land and buildings and wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of title arising between the Government and another claimant cannot be settled by the Judge in a reference Under Section 18 of the Act. When the Government itself claims to be the owner of the land, there can be no question of its acquisition and the provisions of the Land Acquisition Act cannot be applicable, in our opinion the statement of law so made by the learned Judicial Commissioners is correct 26. This Court answered the question under consideration in the negative and held that the acquisition of land wherein the ownership or the entirety of rights already vested in the State on which there were no private rights or encumbrances, such land was beyond the purview of LA Act. We agree with the position of law highlighted in Sharda Devi (2003) 3 SCC 128 but the question is of its applicability on the factual situation of the present case. Before we consider this aspect, we may also deal with the statutory provisions and the decisions of this Court and the two decisions of the Punjab High Court upon which strong reliance has been placed on behalf of the Appellant in support of the argument that acceptance of the highest bid in public auction under Rule 90 of the 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appointed by him for the purpose. Provided that no bid shall be approved until after the expiry of a period of seven days from the date of the auction. (11) Intimation of the approval of a bid or its rejection shall be given to the highest bidder (hereinafter referred to as the auction purchaser) by registered post acknowledgement due and the auction purchaser shall where the bid has been accepted be required within fifteen days of the receipt of such intimation to send by registered post acknowledgement due or to produce before the Settlement Commissioner or any other officer appointed by him for the purpose a treasury challan in respect of the deposit of the balance of the purchase money: Provided that the Settlement Commissioner or other officer appointed by him in this behalf may, for reasons to be recorded in writing, extend the aforesaid period of fifteen days by such period, not exceeding fifteen days, as the Settlement Commissioner or such other officer may think fit. Provided further that the period extended under the preceding proviso may further be extended (without any limit of time) by the Chief Settlement Commissioner. (12) The balance of the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale certificate shall be made out jointly in the name of all such persons, and shall specify the extent of interest of each in the property. Provided that if every such displaced person who has associated himself with the auction-purchaser sends an intimation in writing to the Regional Settlement Commissioner that the sale certificate may be made out in the name of the auction-purchaser, the sale certificate may be made out in the name of the auction-purchaser. 28. In Bombay Salt and Chemical Industries AIR 1958 SC 289, this Court with reference to the public auction of certain salt pans which were evacuee property and formed part of the compensation pool constituted under the 1954 Act held in para 10 of the Report as under: 10. It is clear from the rules and the conditions of sale set out above that the declaration that a person was the highest bidder at the auction does not amount to a complete sale and transfer of the property to him. The fact that the bid has to be approved by the Settlement Commissioner shows that till such approval which the Commissioner is not bound to give, the auction-purchaser has no right at all. It would further appear that even the approval o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 90 of the 1955 Rules, held that till a sale certificate was issued to the highest bidder and till the balance of the purchase money had been paid, rights of ownership would not vest in the auction-purchaser and the proprietary rights, therefore, would not stand transferred by the mere fact that the highest bid of the auction-purchaser has been accepted. The Division Bench of the Punjab High Court noticed the lacuna in the 1954 Act about transitional stage after the acceptance of the highest bid at the auction and till the sale certificate was granted. Pertinently, with regard to the provisional possession given to the auction-purchaser on acceptance of the highest bid, the Division Bench of the Punjab High Court observed as under: 8. After provisional possession has been given, the auction-purchaser, even though he does not possess proprietary rights, has possessory rights. He has the right of possession which can exist independently of ownership. Possession and ownership may co-exist but in a number of cases a person may be the owner of a thing and not possess it; and conversely, a person may be the possessor without being the owner. A person, who is a possessor but not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion was in fact given to the Appellant's husband. On 16.06.1980, the concerned authority asked the auction-purchaser to deposit Rs. 14,992/- as balance sale consideration which was done by the Appellant within the prescribed time (Appellant's husband had died in the meanwhile) and sale certificate was issued in favour of the Appellant on 22.08.1980. The said sale certificate was registered on 15.07.1981. it may be noticed here that the sale certificate mentions that the Appellant has been declared purchaser of the subject property with effect from 11.12.1958 but as a matter of law as indicated above, the ownership could have transferred in favour of the Appellant only in 1980 when she paid full purchase price. In fact no ownership was transferred in favour of the Appellant even on that date. We shall indicate the reason therefor a little later. 34. What is the effect of provisional possession which was given to the Appellant's husband in 1960 on approval of his highest bid? Does it amount to creation of an encumbrance in the property? If the provisional possession given to the Appellant's husband amounted to creation of an encumbrance, whether the said property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbrances thus: 18. The word Encumbrances in regard to a person or an estate denotes a burden which ordinarily consists of debts, obligations and responsibilities. In the sphere of law it connotes a liability attached to the property arising out of a claim or lien subsisting in favour of a person who is not the owner of the property. Thus a mortgage, a charge and vendor's lien are all instances of encumbrances. The essence of an encumbrance is that it must bear upon the property directly and in-directly and not remotely or circuitously. It is a right in re aliena circumscribing and subtracting from the general proprietary right of another person. An encumbered right, that is a right subject to a limitation, is called servient while the encumbrance itself is designated as dominant.... 40. The word encumbrance , according to its ordinary significance, means any right existing in another to use the land or whereby the use by the owner is restricted. The word encumbrance imports within itself every right or interest in the land, which may subsist in a person other than the owner; it is anything which places the burden of a legal liability upon property. The word encumb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LA Act but if some private rights have been created in such property or the property has encumbrance(s), the acquisition of such land is not beyond the pale of the LA Act. 43. Madan Lal Nangia (2003) 10 SCC 321 has been relied upon by the Division Bench in the impugned order in upsetting the decision of the Single Judge. Mr. Ranjit Kumar, learned senior Counsel for the Appellant sought to distinguish this judgment. He submitted that Madan Lal Nangia (2003) 10 SCC 321 was a case where this Court was concerned with the properties which vested in the custodian and having regard to this aspect, this Court said that merely because the properties vest in the custodian as an evacuee property it does not mean that the same cannot be acquired for some other purpose. 44. It is true that facts in Madan Lal Nangia (2003) 10 SCC 321 were little different but, in our view, the legal position highlighted therein does not become inapplicable to the present case on that ground. In paragraphs 16, 17 and 18 of the Report (Pgs. 334-335), this Court observed as follows: 16...A property is a composite property because a private party has an interest in that property. The scheme of separation, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red for some other public purpose. (iii) When a challenge is laid to the acquisition of the land at a belated stage then if the court is inclined to allow such a belated challenge, it must first satisfy itself that the person challenging acquisition has title to the land. 46. What follows from proposition (i) is also this that after the acquisition of evacuee property Under Section 12, if any encumbrance is created or interest of a private person intervenes therein, such land even if owned by the government can be acquired under the LA Act. This is in congruity and consonance with Sharda Devi (2003) 3 SCC 128 as well. 47. When the facts of the instant case are seen in light of the above legal position, we are of the considered view that the appeal must fail. In the first place, as noticed above, by approval of the highest bid given by the Appellant's husband followed with provisional possession, an encumbrance was created in 1960 in the subject land which was part of the compensation pool before the acquisition proceedings were initiated and, therefore, it could have been acquired by the Delhi Administration under the LA Act. Secondly, and equally important, the acquis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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