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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.

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

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(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

decision was taken to transfer the subject property out of the

compensation pool to displaced persons. In an auction held

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.

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

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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.

4.After publication of the declaration under Section 6 on

6.1.1969, notices under Sections 9 and 10 of the LA Act were

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

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

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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

of any evacuee in the evacuee property stands extinguished

and the evacuee property vests absolutely in the Central

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

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.

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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

respondents with effect from the said date, there is no

inherent contradiction between the transfer of title in favour of

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

Development Authority & Ors.,

1

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

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

Nangia & Ors.

2

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 6 6

Central Government only after the notification of acquisition

under Section 12 of the DPCR Act is issued but not prior

thereto.

9.On the other hand learned counsel appearing on behalf

of the respondents has contended that the acquisition of

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

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

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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

Central Government could have initiated the process of

acquisition of its own property under the provisions of the LA

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

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

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anterior to the date of transfer of title in favour of the

respondents.

11.Two questions as set out below, in our considered view,

arise for determination in the present case.

(i)Whether the land, after issuance of notification

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

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

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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

an evacuee property after issuance of appropriate notice in the

manner prescribed and after holding an inquiry in the matter.

Under Section 8 any property declared as evacuee property

under Section 7 is deemed to have vested in the Custodian.

Possession of all such properties is to be taken over by the

Custodian under Section 9 of the Act. Section 10 deals with

the powers and duties of the Custodian and may be usefully

extracted herein below.

“10 - Powers and duties of the Custodian generally-

(1) Subject to the provisions of any rules that may

be made in this behalf, the Custodian may take

such measures as he considers necessary or

expedient for the purposes of securing,

administering, preserving and managing any

evacuee property and generally for the purpose of

enabling him satisfactorily to discharge any of the

duties imposed on him by or under this Act and

may, for any such purpose as aforesaid, do all acts

and incur all expenses necessary or incidental

thereto.

(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;

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(b) appoint a manager for the property of the

evacuee or for carrying on any business or

undertaking of the evacuee and authorize the

manager to exercise any of the powers of the

Custodian under this section;

(c) enter, or authorize any other person to enter, any

land or premises to inspect any evacuee property;

(d) take all such measures as may be necessary to

keep any evacuee property in good repair;

(e) complete any building which has vested in him

and which requires to be completed;

[***]

(i) take such action as may be necessary for the

recovery of any debt due to the evacuee;

(j) institute, defend or continue any legal proceeding

in any Civil or Revenue Court on behalf of the

evacuee or refer any dispute between the evacuee

and any other person to arbitration or compromise

any claims, debts or liabilities on behalf of the

evacuee;

(l) in any case where the evacuee property which

has vested in the Custodian consists of a share or

shares in a company, exercise, notwithstanding

anything to the contrary contained in the

3

Indian

Companies Act, 1913 (7 of 1913 ), or in the articles

of association of the company, the same rights in

the matter of making a requisition for the convening

of a meeting or of presenting a petition to the Court

under the provisions of the Indian Companies Act,

1913 , or the articles of association of the company

or in any other matter as the evacuee shareholder

himself could have done had he been present,

although the name of the Custodian does not

appear in the register of members of the company;

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(ll)

in any case where the evacuee property which

has vested in the Custodian consists of fifty- one

per cent. or more of the shares in a company, the

Custodian may take charge of the management of

the whole affairs of the company and exercise, in

addition to any of the powers vested in him under

this Act, all or any of the powers of the directors of

the company, notwithstanding that the registered

office of such company is situate in any part of the

territories to which this Act extends, and

notwithstanding anything to the contrary contained

in this Act or the Indian Companies Act, 1913 (7 of

1913 ), or in the articles of association of the

company:

Provided that the Custodian shall not take

charge of such management of the company except

with the previous approval of the Central

Government;

(m) incur any expenditure, including the payment of

taxes, duties, cesses and rates to Government or to

any local authority

;

(n) pay to the evacuee, or to any member of his

family or to any other person as in the opinion of

the Custodian is entitled thereto, any sums of

money out of the funds in his possession;

(o) transfer in any manner whatsoever any evacuee

property, notwithstanding anything to the contrary

contained in any law or agreement relating thereto:

Provided that the Custodian shall not sell any

immovable property or any business or other

undertaking of the evacuee, except with the

previous approval of the Custodian- General;

(p)

acquire any non- evacuee interest in evacuee

property, whether by way of purchase or otherwise:

Provided that no such acquisition shall be

made except with the previous approval of the

Custodian- General;

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(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

alia, for the purpose of making payment of compensation and

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

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

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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

(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

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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

Act brings the evacuee property into a common pool which is

to be utilised in accordance with the provisions of the Act.

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

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

Property, Punjab an Others

3

though rendered in a somewhat

different context. The relevant details thereof in para 9 may be

extracted below.

3

AIR 1961 SC 1320

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“9. Section 12 of the 1954 Act empowers the

Central Government to acquire evacuee property for

rehabilitation of displaced persons by publishing in

the official gazette a notification to the effect that it

has decided to acquire such evacuee property in

pursuance of this provision. ……………………………

Sub-section 2 of s.12 of the Act provides that on the

publication of the notification under sub-s. 1 the

right, title or interest of any evacuee in the property

specified in the notification shall immediately stand

extinguished and that property shall vest absolutely

in the Central Government free from all

encumbrances. The power of the Custodian under

the Administration of Evacuee Property Act, 1950,

to allot any property to a person or to cancel an

allotment existing in favour of a person rests on the

fact that the property vests in him. But the

consequence of the publication of the notification by

the Central Government under s. 12(1) of the

Displaced Persons (Compensation and

Rehabilitation) Act with respect to any property or a

class of property would be to divest the Custodian

completely of his right in the property flowing from

s.8 of the Administration of Evacuee Property Act,

1950, and vest that property in the Central

Government. He would, therefore, not be competent

to deal with the property in any manner in the

absence of any provision in either of these two

enactments permitting him to do so. No provision

was, however, pointed out to us in either of these

Acts whereunder despite the vesting of the property

in the Central Government the Custodian was

empowered to deal with it. Sub-s. 4 of s. 12 of the

1954 Act provides that all evacuee property

acquired under that section shall form part of the

compensation pool. Under s. 16(1) of this Act the

Central Government is empowered to take such

measures as it considers necessary or expedient for

the custody, management and disposal of the

compensation pool. Sub-s. 2 of s. 16 empowers the

Central Government to appoint such officers as it

deems fit or to constitute such authority or

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corporation as it deems fit for the purpose of

managing and disposing of the properties forming

part of the compensation pool. Section 19 of the Act

provides that notwithstanding anything contained

in any contract or any other law for the time being

in force but subject to the rules that may be made

under the Act the managing officer or managing

corporation may cancel any allotment etc., under

which any evacuee property acquired under the Act

is held or occupied by a person whether such

allotment or lease was granted before or after the

commencement of the Act. This provision thus

confers the power to deal with evacuee property

acquired under the Act only on a managing officer

appointed or managing corporation constituted

under the Act and makes no mention whatsoever of

the Custodian appointed under the Administration

of Evacuee Property Act. No doubt, under s.10 of

the Administration of Evacuee Property Act the

Custodian is empowered to manage evacuee

property and in exercise of his power he will be

competent to allot such property to any person or to

cancel an allotment or lease made in favour of a

person. Apart from the fact that subsequent to the

issue of the notification under s. 12(1) of the

Displaced Persons (Compensation and

Rehabilitation) Act, the property would cease to be

evacuee property, the aforesaid powers of the

Custodian would be in conflict with those conferred

by s.19 of the 1954 Act on a managing officer or a

managing corporation constituted under that Act.”

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

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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

formulated for an answer in the present appeal. In Saraswati

Devi (supra) on an exhaustive consideration of the issue with

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

Raj

4

was approved by this Court to further hold that such

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 18 18

take note of the manner in which the earlier decision of this

Court in Sharda Devi vs. State of Bihar

5

has been

understood in Saraswati Devi (supra), namely, it is only such

land in respect of which the entirety of the rights vests in the

State and on which land there are no private rights or

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)

….……..…….....................J.

(PRAFULLA C. PANT)

NEW DELHI

SEPTEMBER 04, 2015.

5

2003 (3) SCC 128

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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.

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.

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The I.A. stands disposed of in the above terms.

...……..……......................J.

(RANJAN GOGOI)

….……..…….....................J.

(PRAFULLA C. PANT)

NEW DELHI

SEPTEMBER 04, 2015.