TMI Blog1986 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain arise ? In other words, the question was whether the land must be deemed to have vested in the State on March 25, 1970, when the possession was taken with the consent of the landlord or on March 22, 1971, when the award was passed ? The Tribunal took the view that the vesting is on the date of the passing of the award, i.e., March 22, 1971, which conclusion is questioned by the assessee before us. Title to property can pass in two ways, i.e., either by the execution of a sale deed as contemplated by the Transfer of Property Act or by operation of law. This is a case of property passing by operation of law. In such a case, we must look to the provisions of the statute-Land Acquisition Act--to find out when does the property pass to wit, when does the property vest in the State. There are two provisions in the Land Acquisition Act (hereinafter referred to as " the Act "), which are relevant on this aspect. They are section 16 and sub-sections (1) and (2) of section 17. They read as follows: " 16. Power to take possession.-When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances,." Reference may also be made to section 48(1) which provides that "the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken ". A reading of the above provisions makes it clear that the land vests in the Government only when (a) possession is taken consequent upon the passing of the award (section 16), (b) when possession is taken in pursuance of a direction made under section 17(1), or (c) when possession is taken under section 17(2). There is no other provision in the Act which provides for vesting of the land in the Government. The situation provided by section 16 is the normal, i.e., generally adopted one, while the situations provided by subsections (1) and (2) of section 17 are special ones, where, in view of the urgency, possession is taken even prior to the passing of the award. In the present case, it is admitted, possession was not taken either tinder sub-section (1) or sub-section (2) of section 17. Nor was possession taken following the passing of award. It was voluntary act on the part of the assessee; possession was given and taken with the mutual consent of both the parties before the award was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be restored to him. We may repeat that vesting of the land under the Act is a matter of law and riot a matter of mutual consent or agreement. We shall now refer to the decisions brought to our notice. The Full Bench decision of this court in Revenue Divisional Officer v. Vasireddy Rama Bhanu Bhupal, AIR 1970 AP 262, may be noticed first. In this case, possession was taken with the consent of the landlord prior to the initiation of the land acquisition proceedings. Subsequently, an award was passed. The question arose, whether interest is payable from the date of taking possession of the land or only from the date of the award. The Full Bench held that on the language of section 28, interest is payable " from the date on which he took possession of the land ......... In the face of the express language of the provision, it was held that the interest is payable from the date of taking possession of the land and that in such a case, date of passing of the award is not relevant. The Full Bench further observed that section 28 of the Act does not say that the possession of the land should have been taken under the Act and, therefore, possession taken by private negotiations is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fifteen days from the publication of the notice mentioned in section 9(1), the Possession previously obtained will be deemed to be the possession of the Government under section 17(1) of the Act and the land will vest in the Government free from all encumbrances." (emphasis added). From the above paragraph, it appears that though possession was taken earlier, the Supreme Court was of the opinion that it should be related to the direction made under section 17(1). They also held that the possession previously obtained will be deemed to be the possession of the Government under section 17(1) of the Act which evidently means that the vesting took place on the expiry of fifteen days from the date of publication of the notice under section 9(1). This aspect is made clearer in paragraph 7 (p. 1578), where it is observed : " It is clearly implicit in the observations that after possession has been taken pursuant to a notification under section 17(1), the land vests in the Government and the notification cannot be cancelled under section 21 of the General Clauses Act, nor can the notification be withdrawn in exercise of the powers under section 48 of the Land Acquisition Act." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of by the Government even before the acquisition proceedings had started, but appropriate proceedings under section 9(1) and section 17(l) were also taken though there was no actual 'taking of possession under section 17(1). Under those circumstances, this court observed : `In the present case, a notification under section 17(1) and (4) was issued by the State Government and possession which had previously been taken must, from the date of expiry of fifteen days from the publication of the notice under section 9(1), be deemed to be the possession of the Government'. " We are, therefore, of the opinion that none of the cases cited by learned counsel for the assessee support his contention. Vesting takes place (a) when possession is taken consequent upon the passing of the award, or (b) when possession is taken consequent upon the direction made under section 17(1) of the Act, or (c) where possession is taken as contemplated under sub-section (2) of section 17. Mere taking of possession by itself does not bring about vesting. However, where possession is taken either before the initiation of the acquisition proceedings or during the acquisition proceedings otherwise than b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on passing the award on March 22, 1971, the vesting should be shifted to March 25, 1970, on the day when possession was delivered. Section 16 or 17 does not accommodate such a situation. To reiterate possession taken on March 25, 1970, cannot be connected to section 16 or section 17 and such bare possession does not have the effect of vesting. In RDO v. Vasireddy Rama Bhanu Bhupal, AIR 1970 AP 262, the Full Bench of this court while considering the issue of payment of interest from the date of taking possession highlighted the vital distinction between the factum of taking possession and taking possession pursuant to section 16 or section 17 of the Act and held that the payment of interest can be directed from the date of taking possession though such possession is taken under the provisions of the Act. I agree with the answer proposed. Learned counsel for the assessee makes an oral request for grant of certificate to appeal to the Supreme Court under section 261 of the Income-tax Act on the ground that the present case is a fit one to appeal to the Supreme Court. We are not, however, satisfied that this is a fit case as such. The oral request is accordingly rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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