Major Gopal Singh And Others vs Custodian, Evacuee Property, Punjab

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 101 of 1959

Decision Date: 15 March, 1961

Coram: J.R. Mudholkar, Raghubar Dayal

In the matter titled Major Gopal Singh and Others versus Custodian, Evacuee Property, Punjab, the Supreme Court delivered its judgment on 15 March 1961. The opinion was authored by Justice J. R. Mudholkar, who sat on a bench that also included Justice Subbarao, Justice K. Dayal, and Justice Raghubar. The petitioners were Major Gopal Singh together with several others, while the respondent was the Custodian of Evacuee Property for the State of Punjab. The case is reported in the 1961 All India Reporter at page 1320 and in the 1962 Supreme Court Reporter (1) at page 328, with a citation in the 1962 Supreme Court Reports at page 994 (4). The statutes that formed the basis of the dispute were the Administration of Evacuee Property Act, 1950 (specifically sections 10 and 27) and the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (sections 12 and 19). The headnote summarised the factual matrix as follows: the appellants, who were displaced persons from West Pakistan, received a quasi‑permanent allotment of land in the village of Raikot in 1949. On 31 October 1952 the Assistant Custodian cancelled the allotments of fourteen other allottees in the village of Karodian and also cancelled the appellants’ allotment in Raikot, subsequently allocating land in Karodian to the appellants and granting the Raikot lands to different persons. Both the fourteen allottees of Karodian and the appellants filed applications for review of the cancellation orders. The review application of the fourteen allottees was dismissed, prompting them to seek a revision before the Custodian General. The Custodian General reversed the cancellation concerning the fourteen allottees and restored their allotments on 17 December 1954. In response, on 6 January 1955 the appellants approached the Custodian General requesting that his office call up their pending review application and overturn the 31 October 1952 cancellation of their Raikot allotment. The Custodian General declined, asserting that his authority to revise had been withdrawn by the Displaced Persons (Compensation and Rehabilitation) Act, 1954. The appellants argued that the Custodian General still retained the power to revise the order.

The Court held that the enactment of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 effectively removed the Custodian General’s power to cancel any allotments. By issuing a notification under section 12(1) of that Act, the title or interest of the evacuee in the properties identified by the notification was extinguished, and the ownership of those properties vested absolutely in the Central Government. Consequently, the Custodian’s right to manage the properties under the Administration of Evacuee Property Act, 1950 terminated, and the management responsibilities were transferred to a new set of officials designated by the later legislation. Although no managing officer or corporation had yet been appointed under the new statutory regime, the Court emphasized that no other person could lawfully exercise the power of cancellation of allotments. The decision cited the earlier authority of Bal Mukund v. State of Punjab, I.L.R. 1957 Punj. 712, which supported the view that the Custodian’s powers were superseded by the provisions of the 1954 Act. The judgment pertained to Civil Appeal No. 101 of 1959, which was filed by special leave from the judgment and order dated 8 November 1957 issued by the Deputy Custodian General, Evacuee Property.

The matter was listed as Revision Petition No. 17‑R/55 of 1955 and was argued before a bench consisting of counsel Achhru Ram and K. L. Mehta on behalf of the appellants, counsel B. K. Khanna and T. M. Sen for respondent No. 1, and counsel N. S. Bindra together with A. G. Ratnaparkhi for respondents Nos. 2‑4. The judgment was delivered on 15 March 1961 by Justice Mudholkar.

The appellants were displaced persons who had originated from West Pakistan. In 1949 they had each been allotted, on a quasi‑permanent basis, a parcel of land consisting of twenty‑four standard acres together with fifteen and three‑quarters units situated in the village of Raikot, which lay in Ludhiana District. Their father, Sardar Nand Singh, had also been found entitled to a quasi‑permanent allotment comprising forty standard acres and five and one‑quarter units, but that allotment was made in a different village of the same district called Humbran. Because the two villages were separated by roughly twenty‑five miles, Sardar Nand Singh applied to have his holdings consolidated with those of his children in the village of Raikot. The father died while the application was still pending, and after his death the appellants continued to pursue the consolidation request.

The Assistant Custodian rejected the consolidation application on 23 July 1951, holding that no land was available in Raikot for such a purpose. The appellants challenged that decision by filing a revision petition, but the Additional Custodian dismissed the petition on 20 August 1952. Undeterred, the appellants filed another revision petition before the Custodian General on 7 October 1952.

During the pendency of that revision petition, the Additional Custodian for the State of Punjab cancelled the allotments of fourteen quasi‑permanent allottees in the village of Karodian, also situated in Ludhiana District. The cancellation was based on the finding that those fourteen persons were entitled only to suburban land and had therefore been wrongly allotted land in Karodian. Acting on his own authority, the Additional Custodian issued an order dated 31 October 1952 cancelling the 1949 Raikot allotment that had been made in favour of the appellants and substituting land in Karodian for both the appellants’ former Raikot parcel and the lands that had originally been allotted to their father. The substitute land was taken from the area released by the cancellation of the fourteen Karodian allotments.

The fourteen allottees subsequently applied for a review of the order that cancelled their allotments, contending that the cancellation stemmed from a misapprehension of the facts and that they were not, in fact, entitled to suburban land. At the same time, the appellants also filed a review application seeking relief from the order that cancelled their quasi‑permanent allotment in Raikot. The Additional Custodian recommended to the Custodian General that the lands taken from the fourteen Karodian allottees be restored to them, acknowledging that those allottees had indeed been improperly allotted suburban land, but he referred the matter back to the Additional Custodian for a final decision. The review application of the appellants remained pending until the decision on the fourteen allottees' application was rendered.

The Court observed that the matter was referred back to the Additional Custodian for a fresh decision. The application lodged by the appellants remained pending until the outcome of the application filed by the fourteen allottees of Karodian was known. The Additional Custodian eventually dismissed the appellants’ application, reasoning that rule fourteen, clause six of the Evacuee Property Rules, which had become effective on 22 July 1952, barred any cancellation of the allotment in favour of the appellants. On 17 December 1954, the Deputy Custodian General, before whom the fourteen allottees had filed a revision application, set aside the earlier order of the Additional Custodian and restored to those allottees the land originally allotted to them, thereby reinstating the allotment that had previously been cancelled. Consequently, the allotment of the Karodian land that had been made to the appellants was automatically annulled. On 6 January 1955, the appellants approached the Deputy Custodian General requesting that their review application be called up and that the order dated 31 October 1952, which had cancelled their original 1949 allotment of Raikot lands, be revised. Following the cancellation of the appellants’ Raikot allotment, the land was allotted to respondents numbered two through four, who were consequently impleaded as parties before the Deputy Custodian General. By an order dated 8 November 1957, the Deputy Custodian General dismissed the appellants’ application, prompting the appellants to seek special leave to appeal to this Court.

The Court noted that the Deputy Custodian General had based his dismissal on the contention that his power to revise the October 1952 order had been withdrawn by the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (Act 44 of 1954) and the related notification issued on 24 March 1955. In reaching this conclusion, the Deputy Custodian General relied upon the precedent set in Bal Mukund v. The State of Punjab. That earlier decision held that the Custodian General’s authority to deal with matters of this nature had been removed by the 1954 Act, vesting such powers in a different authority, and that there was no statutory provision allowing the continuation of proceedings originally commenced under the Administration of Evacuee Property Act, 1950, but not yet concluded. Counsel for the appellants, Mr. Achhruram, challenged the correctness of that view, arguing that the 1950 Act contained no specific clause stating that, after its commencement, the jurisdiction of the various authorities created by that Act to handle allotment or cancellation of evacuee property would cease. Counsel for the Custodian General, Mr. Khanna, contended that sections twelve, paragraph two, and nineteen of the 1954 Act implied such an effect, asserting that section twelve empowered the Central Government to acquire evacuee property for the rehabilitation of displaced persons.

The provision allows the Central Government to acquire the property of displaced persons by publishing a notification in the official Gazette stating that it has decided to acquire such evacuee property under the said provision. Both parties agreed that, by way of notification S. R. 0. 697 dated 24 March 1955, the Central Government declared its intention to acquire all evacuee property that had been allotted to displaced persons by the Custodian pursuant to the “Conditions” specified in the Government of Punjab’s Department of Rehabilitation notification No. 4892‑6 dated 8 July 1949, subject to certain categories of property that were listed in the accompanying schedule. The lands at Raikot had been allotted to the appellants under that Punjab Government notification. It was not contested that the Raikot lands did not fall within any of the excepted categories enumerated in the schedule. Sub‑section 2 of section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, as reported in I.L.R. 1957 Punj. 712, provides that the moment a notification under sub‑section 1 is published, the right, title or interest of any evacuee in the property specified therein is extinguished immediately, and the property thereafter vests absolutely in the Central Government, free of all encumbrances. The Custodian’s authority under the Administration of Evacuee Property Act, 1950, to allot any property to a person or to cancel an existing allotment depends upon the fact that the property vests in the Custodian. Consequently, the effect of the Central Government’s notification issued under section 12(1) of the Displaced Persons (Compensation and Rehabilitation) Act with respect to any particular property or class of property is to remove entirely the Custodian’s rights in that property, rights that arise from section 8 of the Administration of Evacuee Property Act, 1950, and to vest the property in the Central Government. In the absence of any provision in either statute that permits the Custodian to act on the property after such vesting, the Custodian would not be competent to deal with the property in any manner. No provision was identified in either Act that, notwithstanding the vesting of the property in the Central Government, authorises the Custodian to continue exercising any powers over it. Sub‑section 4 of section 12 of the 1954 Act stipulates that all evacuee property acquired under that section shall become part of the compensation pool. Section 16(1) of the same Act empowers the Central Government to take any measures it deems necessary or expedient for the custody, management and disposal of the compensation pool. Sub‑section 2 of section 16 further authorises the Central Government to appoint officers or to constitute an authority or corporation, as it sees fit, for the purpose of managing and disposing of the properties that form part of the compensation pool. Section 19 of the Act provides that, notwithstanding any contract or other law then in force, and subject to rules made under the Act, the managing officer or managing corporation may cancel any allotment or lease of evacuee property that is held or occupied by a person, whether such allotment or lease was granted before or after the Act’s commencement.

In this case, the Court observed that a managing officer or a managing corporation may cancel any allotment or lease under which any evacuee property acquired pursuant to the Act is held or occupied by a person, irrespective of whether the allotment or lease was granted before or after the commencement of the Act. This provision therefore confers the power to deal with evacuee property acquired under the Act exclusively on a managing officer appointed or a managing corporation constituted under the same Act, and it makes no reference whatsoever to the Custodian appointed under the Administration of Evacuee Property Act. The Court noted that, under section 10 of the Administration of Evacuee Property Act, the Custodian is empowered to manage evacuee property and, in the exercise of that power, the Custodian may allot such property to any person or may cancel an allotment or lease made in favour of a person. However, the Court pointed out that after the issuance of the notification made under section 12(1) of the Displaced Persons (Compensation and Rehabilitation) Act, the property would cease to be characterised as evacuee property, and consequently the powers of the Custodian would clash with the powers conferred by section 19 of the 1954 Act on a managing officer or a managing corporation created under that Act. In other words, to the extent of this conflict, the provisions of section 10 of the 1950 Act and section 19 of the 1954 Act cannot operate together. The Court reiterated that the powers conferred by subsection (1) of section 19 of the 1954 Act are intended to prevail notwithstanding anything contained in any other law that is in force at the time. Accordingly, those powers must override the provisions of section 10 of the Administration of Evacuee Property Act. The Court further stated that, although there is no record showing that a managing officer had been appointed with respect to the Raikot properties acquired under the notification dated 24 March 1955, it is unnecessary to determine that fact for the purpose of the decision. The essential question, the Court said, is who, after the commencement of the 1954 Act, could lawfully cancel an allotment. Section 10 of the 1954 Act provides that only a managing officer or a managing corporation may do so, which means that no other authority may cancel an allotment even if some other law ostensibly authorises another person or authority to do so. Nevertheless, Mr Achhruram argued that the appellants’ rights were protected by section 10 of the Displaced Persons (Compensation and Rehabilitation) Act. The Court reproduced the text of that section, which reads: “Special procedure for payment of compensation in certain cases—Where any immovable property has been leased or allotted to a displaced person by the Custodian under the conditions published (a) by the notification of the Government of Punjab in the Department of Rehabilitation No 4892‑S or 4892‑S dated 8 July 1949, or (b) by the notification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No 8R or 9R dated 23 July 1949, and published in the official Gazette of that State dated 7 August 1949, and such property is acquired under the provisions of this Act and forms part of the compensation pool, the displaced person shall, so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of compensation to such displaced person, transfer to him such property on such terms and conditions as may be prescribed.”

The Court examined the provision of the Displaced Persons (Compensation and Rehabilitation) Act which stated that, while the property remained vested in the Central Government and formed part of the compensation pool, a displaced person was entitled to continue possession of that property on the same terms as his possession immediately before the acquisition. The provision further allowed the Central Government, for the purpose of paying compensation, to transfer the property to the displaced person on such terms and conditions as might be prescribed. The Court noted that an explanatory note followed this provision, but that note did not affect the argument presented by Mr. Achhruram. It was acknowledged that the Raikot lands had indeed been allotted to the appellants under the notification described in clause (a) of the same section; consequently, the appellants would have been eligible for the benefits provided by the section if they fulfilled every other requirement, whether expressly stated or implied. Implicit in the wording of the section was the requirement that the displaced person to whom land was allotted must have “held” the land and must have been in possession of it at the date of the notification. The Court observed that there was no dispute that the appellants had ceased to hold and had lost possession of the Raikot lands before that notification was published. Even if the Custodian’s order cancelling the allotment in the appellants’ favour was erroneous, the Court held that the outcome would remain unchanged because the decisive factor was the factual position of holding and possession at the date of the notification. Mr. Achhruram then drew attention to the “Conditions” governing land allotments under the same notification, specifically pointing out that condition number six authorised the Custodian or the rehabilitation authority to resume or cancel an allotment only on the grounds enumerated in that condition. He argued that the cancellation of the allotment in the appellants’ favour was impermissible because it was not based on any of those stipulated grounds. The Court stated that this argument might or might not be correct, but reiterated that the appellants had lost possession before the notification and therefore could not claim the protection of the section. Furthermore, the Court observed that the Custodian, having divested the property as of 24 March 1955, had become functus officio with respect to that property and was therefore unable to correct any past error concerning the cancellation of the allotment. The Court conceded that, had the appellants been in possession at the critical moment, they would have been entitled to obtain a permanent transfer of the Raikot lands in their favour; the appellants, through no fault of their own, were deprived of that right. While this loss was regrettable, the Court held that none of the authorities created under the Administration of Evacuee Property Act possessed the power to remedy the wrong inflicted upon the appellants. The issue of whether any authority established under the Displaced Persons (Compensation and Rehabilitation) Act could rectify the error was not presented for consideration, and consequently the Court declined to address it.

In this matter, the Court observed that the question of whether any authority created by the Displaced Persons (Compensation and Rehabilitation) Act could intervene had not been presented for determination, and therefore the Court found no basis to comment on that issue. Counsel for the respondents argued that rule 74 of the Displaced Persons (Compensation and Rehabilitation) Rules, 1955 prevented the Custodian from allocating the Raikot property to the respondents while a proceeding was pending before the Custodian General. The rule was quoted in full: “Allotments which are the subject matter of dispute – No property in a rural area in respect of which any case is pending in a Civil Court or before a Deputy Custodian, Custodian or Custodian General, shall be transferred to the allottee.” The Court explained that this rule belonged to Chapter X, titled “Payment of compensation under section 10 of the Act,” and that it dealt solely with the transfer of property to an allottee as a final settlement of a compensation claim. Consequently, the rule did not address the issue of a quasi‑permanent allotment. Moreover, the Court noted that the rule applied only to proceedings before an authority constituted under the Displaced Persons (Compensation and Rehabilitation) Act and not to an authority created under the Administration of Evacuee Property Act, rendering the argument without merit. Further, counsel relied on section 17 of the 1954 Act and on rule 102 made thereunder, contending that the powers of managing officers appointed under that Act were limited to properties that had been entrust­ed to them for management. Section 17 set out the functions and duties of managing officers and managing corporations, with sub‑section (1) stating that they would perform functions assigned under the Act, and sub‑section (2) allowing, subject to the Act and its rules, a managing officer or corporation to take such measures as necessary for securing, administering, preserving, managing or disposing of any property in the compensation pool entrusted to them. The argument advanced that, absent an “entrustment,” a managing officer or corporation possessed no authority over evacuee property. The Court observed that the statute expressly conferred the relevant powers only on managing officers or managing corporations and on no other person. Accordingly, even if no managing officer or corporation had been appointed with respect to the property in question, no other individual could exercise the power to cancel an allotment. The Court also found that the special leave petition and the statement of the case contained no allegation that the property, or the class of properties to which it belonged, had not in fact been entrusted to a managing officer or corporation. As a result, the Court concluded that the respondent could not be permitted to raise a new ground of argument at this stage.

In the course of argument, the Court observed that the contention raised by the petitioners represented a new issue that had not been previously argued. The petitioners premised their claim on the assumption that, notwithstanding the publication of the notification issued under section 12(1) of the Act, the land in question continued to retain the status of evacuee property. The Court noted, however, that section 12(1) constituted a general provision, whereas the specific provision governing the cancellation of an allotment was section 19(1) of the Act, which made no reference to the concept of entrustment. The Court therefore held that the specific provision of section 19(1) must prevail over the general language of section 12(1). The petitioners further argued that the provisions of section 19(1) were subject to rules made under the Act and thus should be read in conjunction with rule 102, which dealt with the cancellation of allotments of leases. The Court reproduced the wording of that rule, which stated: “Cancellation of allotments and leases—A managing officer or a managing corporation may sell any property in the compensation pool entrusted to him or to it, cancel an allotment or terminate a lease, or vary the terms of any such lease or allotment if the allottee or lessee, as the case may be—(a) has sublet or part‑ed with the possession of the whole or any part of the property allotted or leased to him without the permission of a competent authority, or (b) has used or is using such property for a purpose other than that for which it was allotted or leased to him without the permission of a competent authority, or (c) has committed any act which is destructive of or permanently injurious to the property, or (d) for any other sufficient reason to be recorded in writing; Provided that no action shall be taken under this rule unless the allottee or the lessee, as the case may be, has been given a reasonable opportunity of being heard.” The petitioners emphasized that the rule expressly referred to land “entrusted” to the manager and consequently would operate only if entrustment could be established. The Court indicated that the same reasoning applied to section 17, as previously discussed. The petitioners further claimed that rule 102 limited the powers of a managing officer or corporation in relation to cancellation, allowing it only on the specified grounds, and therefore section 19(1) could not be said to be in total conflict with section 10 of the Administration of Evacuee Property Act concerning cancellation of allotments. The Court rejected this argument, noting that, apart from the factual finding that the acquired properties were no longer evacuee properties, clause (d) of rule 102 expressly authorized a managing officer or corporation to cancel an allotment “for any other sufficient reason to be recorded in writing.” The Court concluded that the sole effect of rule 102 was to permit cancellation on the grounds that were stated, and it did not provide any additional protection to the petitioners. Consequently, the rule offered no assistance to the appellants. The Court also observed that although counsel had raised three further points, these did not require consideration in view of the Court’s determination of the effect of sections 12 and 19 of the Act.

The Court noted that the three additional points raised by counsel were not taken up for consideration because, having already decided on the effect of sections twelve and nineteen of the Act, further discussion was unnecessary. Accordingly, the Court ordered that the appeal be dismissed in its entirety. With respect to costs, the Court expressly declined to make any order. The reasoning given was that the present dispute arose solely as a result of a delay on the part of the Custodian General in dealing with the revision application; had there been no such delay, the circumstances leading to the present appeal would not have occurred. As a consequence, the Court found no justification for awarding costs to either side. The final disposition therefore comprised a dismissal of the appeal without any costs being awarded.