State of Punjab vs Suraj Parkash Kapur, Etc

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 349 of 1959

Decision Date: 04/05/1961

Coram: Subba Rao, J.L. Kapur, M. Hidayatullah, J.C. Shah, Raghubar Dayal

The judgment was delivered on 4 May 1961 by the Supreme Court of India in the matter titled State of Punjab versus Suraj Parkash Kapur and others. The bench that heard the case comprised Justices J L Kapur, M Hidayatullah, J C Shah, Raghubar Dayal and Justice Subbarao K. The decision is reported in the law reports as 1963 AIR 507 and 1962 SCR Supplement (2) 711, with further citations recorded as RF 1973 SC2344 (2) and RF 1979 SC1328 (16). The Court considered several statutory provisions, including the Evacuee Property legislation governing lands allotted to evacuees by the Custodian, a Government notification authorising consolidation of holdings, and a draft scheme prepared by the Consolidation Officer. The scheme involved the substitution of lands of lesser value for those already allotted, directed by the State Government. The statutes examined comprised the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (East Punjab Act 50 of 1948) section 14, the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (Act 44 of 1954) sections 10 and 12, the Administration of Evacuee Property (Central) Rules, 1950 rule 14(6), and Article 220 of the Constitution of India.

The respondents, who formed a joint Hindu family and were evacuees from Pakistan, had been allotted certain parcels of land by the Custodian of Evacuee Property. Pursuant to a notification issued by the State Government under section 14 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, the Consolidation Officer prepared and published a draft scheme for the consolidation of holdings. Contrary to the provisions of the Act, the scheme, acting on the directions of the State Government, substituted the respondents’ originally allotted lands with other lands of lower market value. The respondents lodged objections to this substitution, but the Consolidation Officer rejected those objections and the Settlement Commissioner subsequently confirmed the scheme. Before the confirmation became final, the Central Government, by a notification issued under section 12 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954, acquired all evacuee properties and, after the scheme’s confirmation, issued a sanad that conferred proprietary rights in the substituted lands upon the respondents. The respondents, however, filed a writ petition before the High Court under Article 226 of the Constitution prior to the issuance of the sanad. The High Court ultimately set aside the consolidation scheme and directed the Consolidation Officer to resolve the matter in accordance with law. The Supreme Court held that the Central Government’s notification under section 12 of the 1954 Act did not extinguish the respondents’ rights to the lands originally allotted to them by the Custodian, and therefore the respondents were entitled to approach the High Court under Article 226. The Court observed that sections 10 and 12 of the 1954 Act, read together with rule 14(6) of the 1950 Rules, clearly established that the respondents possessed a quasi‑permanent tenure in the allotted lands, granting them a valuable right that persisted as long as they remained in possession, while the title to the lands remained vested in the Central Government.

In this case, the Court observed that once the sanad was issued, the limited interest that the respondents possessed in the allotted lands transformed into a full‑fledged proprietary right, as illustrated in Amar Singh v. Custodian, Evacuee Property, Punjab, [1957] S.C.R. 801. The Court further held that the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 did not give the Consolidation Officer the authority to deprive an allottee of his lands unless the officer either provided other lands of equal value or paid appropriate compensation, and that the State Government also lacked any power to direct the officer otherwise. Because, in the present matter, the lands allotted to the respondents were replaced by lands of lower value and no compensation was paid, the High Court was correct in setting aside the order that had confirmed the consolidation scheme.

The appeal by certificate was filed against the Punjab High Court order dated 9 November 1956, which had set aside the Consolidation Officer’s order and directed him to proceed in accordance with law. The respondents, who belonged to a joint Hindu family and were evacuees from Pakistan, had on 3 March 1950 received, from the Custodian of Evacuee Property, an allotment comprising eleven standard acres and nine units of Grade ‘A’ land in Pati Kankra, Shahabad Estate, Tehsil Thanesar, Karnal District. The allocated land was valued as equivalent to 123 standard kanals and 18 standard marlas of Grade ‘A’ land, and the family took possession and allegedly made improvements. On 28 July 1954, the State Government issued a notification under section 14 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 indicating its intention to devise a consolidation scheme. Subsequently, on 30 April 1955, the Consolidation Officer published a draft scheme proposing that the respondents would receive eighty‑four standard kanals composed of fifty standard kanals and seven standard marlas of Grade ‘A’ land together with thirty‑four standard kanals and one standard marla of Grade ‘B’ land. The lands proposed for substitution were clearly of lesser value than the original quasi‑permanent tenure lands. Moreover, the consolidation was not executed in strict compliance with the statutory provisions but was carried out according to administrative directions issued by the State Government, which instructed the Consolidation Officer to consider, for the purpose of consolidation, the number of acres held by the evacuee rather than the actual site valuation of the allotted land.

The Court noted that the Consolidation Officer was instructed to consider only the number of acres held by the evacuee and not the actual market valuation of the land allotted to him. The respondents filed objections to the scheme, but those objections were rejected by the Consolidation Officer. Subsequently, on 6 August 1958, the Settlement Commissioner affirmed the scheme prepared by the Consolidation Officer. In the interim, the Displaced Persons (Compensation and Rehabilitation) Act, 44 of 1954, had become law and commenced on 9 October 1954, which was after the estate had been notified for consolidation. On 24 March 1955, the Central Government issued a notification under section 12 of that Act acquiring all evacuee properties to which the Act applied; this notification was released before the Settlement Commissioner confirmed the consolidation scheme. Later, on 23 February 1956, the Central Government issued a sanad granting proprietary rights to the respondents over the lands allotted to them in 1950; this sanad was issued after the Settlement Commissioner’s confirmation of the scheme. Prior to the issuance of the sanad, on 9 November 1955, the respondents filed a petition in the Punjab High Court under article 226 of the Constitution, seeking a writ to set aside the consolidation scheme. The High Court, by its final order dated 1 February 1957, allowed the respondents’ objection and directed the Consolidation Officer to proceed with the matter in accordance with law.

Counsel for the State raised two principal submissions. First, it was contended that the respondents possessed no legal right to maintain a petition under article 226 of the Constitution. Second, it was submitted that the directions issued by the State Government were validly made, and therefore the Consolidation Officer acted within his authority in formulating the scheme based on those instructions. Regarding the first submission, the Court explained that the existence of a right and its alleged infringement constitute the foundation for invoking the jurisdiction of the court under article 226. The right that may be enforced under article 226 is ordinarily a personal or individual right of the applicant. The Court therefore examined whether the respondents had such a right at the time they filed the petition on 9 November 1955. At that date, the Central Government had already issued the notification acquiring all evacuee properties, but the sanad conferring proprietary rights to the respondents had not yet been issued. The nature of a displaced person’s interest in property allotted under the evacuee law had been previously elucidated by this Court in Amar Singh v. Custodian, Evacuee Property, Punjab. In that decision, Justice Jagannadha Das, speaking for the Court, after a detailed review of the relevant law, concluded that the interest of a quasi‑permanent allottee did not constitute property within the meanings of article 19(1)(f) and article 31(2) of the Constitution.

In this passage the Court examined the meaning of Articles 19(1)(f) and 31(2) of the Constitution. The learned Judge, however, emphasized that despite the earlier conclusion that a quasi‑permanent allotment did not create a fundamental right to property, the allottee nevertheless possessed a valuable right in the interest allotted to him. The Judge articulated the legal position by stating: “In holding that quasi‑permanent allotment does not carry with it a fundamental right to property under the Constitution we are not to be supposed as denying or weakening the scope of the rights of the allottee. These rights as recognized in the statutory rules are important and constitute the essential basis of a satisfactory rehabilitation and settlement of displaced land‑holders. Until such time as these land‑holders obtain sanads to the lands, these rights are entitled to zealous protection of the constituted authorities according to administrative rules and instructions binding on them, and of the courts by appropriate proceedings where there is usurpation of jurisdiction or abuse of exercise of statutory powers.” (1) [1957] S.C.R. 801, 836. The judgment further observed that the learned Judge, in reaching this view, had examined all the statutes relevant to the matter, including the Displaced Persons (Compensation and Rehabilitation) Act, 1954 (44 of 1954), and gave particular attention to section 12 of that Act. The Court’s observations underscore that, even after the issuance of the notification referred to, an evacuee continues to enjoy a valuable right in the property allotted to him, and that this right is safeguarded both by the appropriate authorities and by the courts. A careful reading of the provisions of the 1954 Act confirms the correctness of those observations. Section 10 of the Act provides that where any immovable property has been leased or allotted to a displaced person by the Custodian under conditions published (a) by the Government of Punjab in the Department of Rehabilitation No. 4891‑S or 4892‑S, dated 8 July 1949; or (b) by the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No. 8R or 9R, dated 23 July 1949, and such notification was published in the Official Gazette of that State on 7 August 1949, and thereafter the property is acquired under the provisions of the Act and becomes part of the compensation pool, the displaced person shall, for as long as the property remains vested in the Central Government, continue to possess the property on the same terms on which he held it immediately before the acquisition date. The Central Government may, for the purpose of paying compensation, transfer the property to the displaced person on such terms and conditions as may be prescribed. Section 12 of the same Act further provides that if the Central Government deems it necessary to acquire any evacuee property for a public purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation, it may at any time acquire such property by publishing a notification in the Official Gazette stating that the Central Government has decided to acquire the evacuee property in pursuance of this section.

The Government resolved to acquire the evacuee property pursuant to the provision of section twelve of the Administration of Evacuee Property Act, 1950. In this regard, rule fourteen sub‑paragraph six of the rules framed under the same Act is relevant. According to that rule, the Custodian was stripped of the authority to issue any order after 22 July 1952 that would cancel or vary the allotments already made, except for certain narrow exceptions which are not material to the present discussion. Consequently, under the Administration of Evacuee Property Act the respondents acquired a status of quasi‑permanent allottees with respect to the land allotted to them in 1950. After the said cutoff date the Custodian could no longer cancel or amend those allotments. When the Government issued a notification under section twelve of the Act, the property remained vested in the Central Government, and the respondents continued to occupy the land on exactly the same terms that existed immediately before the acquisition, namely a quasi‑permanent tenure. The suggestion that the issuance of the notification extinguished any interest of the respondents in the land is without merit. Therefore, at the time the respondents filed their petition in the High Court they possessed a valuable and enforceable right over the allotted properties, which entitled them to invoke Article 226 of the Constitution for relief. Moreover, on 23 February 1956 the Central Government granted the respondents a sanad that conferred upon them an absolute right in respect of the same properties. Although the sanad was issued after the petition was filed, it was executed before the High Court rendered its decision. By the time the High Court disposed of the petition, the respondents’ limited right had matured into a full‑fledged property right. In these circumstances the High Court was fully justified in taking note of that development. Viewed from any perspective, it is clear that the respondents owned sufficient interest in the land to sustain their petition under Article 226. The second contention raised by the State lacks any foundation. The East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 was enacted, as its long title states, to provide for compulsory consolidation of agricultural holdings and to prevent the fragmentation of such holdings in the State of Punjab. Section fifteen of that Act provides that the scheme prepared by the Consolidation Officer must include compensation to any owner who receives a holding of lower market value than his original holding, and it also requires the recovery of compensation from any owner who receives a holding of higher market value than his original holding. The Act contains no provision that empowers the Consolidation Officer to dispossess a person of any part of his property without allocating to him property of equal value or without paying the requisite compensation should the allotted holding be of lesser market value than the original holding.

In this case, the Court observed that the legislation did not empower the Consolidation Officer to take away any portion of a person’s property without either providing a replacement parcel of equal value or paying compensation when the person was allotted a holding whose market value was less than that of the original holding. The factual matrix showed that the respondents had originally been allotted, on a quasi‑permanent basis, one hundred twenty‑three kanals and eighteen marlas of land classified as ‘A’ Grade by the Custodian, a allocation that was subsequently confirmed by the Central Government. However, when the consolidation process was carried out, the respondents received only fifty kanals and eight and seven marlas of ‘A’ Grade land together with thirty‑four kanals and one marla of ‘B’ Grade land. The Court accepted that the total area and the market value of the land allotted in the consolidation scheme were clearly lower than the area and value of the original allotment, and that the Consolidation Officer had not paid any compensation to make up the deficiency. The State Government, through its counsel, attempted to justify this inequitable situation by relying on instructions that it claimed to have given to the Consolidation Officer. The Court noted that the Act contained no provision that authorised the State Government to issue such instructions to the Consolidation Officer, nor did any provision grant the State the power to make rules or issue notifications that could deprive landowners of any part of their land or to direct the officer in the performance of his statutory duties. Moreover, any rule of that nature would be inconsistent with the explicit provisions of the Act. The Court further observed that no statutory rule or regulation empowering the State Government to give the alleged instructions had been produced before it. Both before the High Court and before the present Court, the counsel for the State had been unable to establish any legal basis for the validity of the instructions. Consequently, the Court held that the order of the competent officers confirming the scheme on the basis of those instructions was illegal and that the High Court’s setting aside of that order was appropriate. In view of these findings, the Court concluded that the appeal was untenable, dismissed it, and ordered the appellant to bear the costs.