Bihari Lal Batra vs The Chief Settlement Commissioner and Ors

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 543 of 1962

Decision Date: 12 March 1964

Coram: N. Rajagopala Ayyangar, P.B. Gajendragadkar, K.N. Wanchoo, J.C. Shah, S.M. Sikri

In this matter, the Supreme Court of India recorded a petition filed by Bihari Lal Batra against the Chief Settlement Commissioner and several other respondents, the judgment being delivered on 12 March 1964. The opinion was authored by Justice N. Rajagopala Ayyangar and the bench was composed of Justices N. Rajagopala Ayyangar, P. B. Gajendragadkar, K. N. Wanchoo, J. C. Shah and S. M. Sikri. The case is reported in the 1965 All India Reporter at page 134 and in the 1964 Supreme Court Reporter, volume 7, page 192. The dispute concerned the validity of an allotment of land to a refugee under the Evacuee Property Act, specifically the application of Rule 2(h) of the Displaced Persons Compensation and Rehabilitation Rules, 1955, which barred allotments in urban areas.

The factual background disclosed that the father of the petitioner owned a substantial amount of agricultural land in what became Pakistan and, together with his family, migrated to India at the time of Partition. The father retained an unsatisfied claim for land allocation and, on 29 December 1955, an allotment of several plots situated in an urban part of a municipality was made in his name. The father had died in 1952, and consequently the allotment was intended to satisfy his claim by vesting the land in the petitioner. Following the issuance of the allocation, the Managing Officer executed a sanad in favor of the petitioner. When the petitioner attempted to take possession of the allotted land, respondents numbered four and five raised objections, contending that the allotted plots fell within the definition of “urban area” as prescribed in Rule 2(h) of the 1955 Rules. They approached the Assistant Settlement Commissioner requesting cancellation of the allotment on that ground. The Assistant Settlement Commissioner accepted the respondents’ argument, allowed the application for cancellation, and set aside the original allotment.

Subsequently, the petitioner filed a revision application before the Chief Settlement Commissioner, which was rejected. The petitioner then instituted a petition under Articles 226 and 227 of the Constitution in the High Court, seeking relief from the cancellation. The High Court dismissed the petition, but thereafter granted a certificate of fitness under Article 133, thereby permitting an appeal to this Court. The Supreme Court addressed two principal issues. First, it held that where an order granting an allotment is set aside by the Assistant Settlement Commissioner or the Settlement Commissioner, any title derived from the continued operation of the sanad or order is likewise lost; this principle was supported by reference to Shri Mithoo Shahani v. Union of India, [1964] 7 S.C.R. 103. Second, the Court rejected the petitioner’s contention that Rule 2(h) of the 1955 Rules was unconstitutional because it allegedly violated Article 14. The Court observed that the objection rested on the proviso to Rule 2(h), which was framed under Section 40 of the relevant Act and came into force on 21 May 1955, together with the other Rules. Since the petitioner’s allotment was made on 29 December 1955 and the sanad was issued two days later, the allotment occurred after the Rules had become effective; therefore the proviso concerning “already made” allotments did not apply, and the rule was valid.

The rule had come into force after the allotment, therefore it was not an “already made” allotment as the proviso to rule 2(h) suggested. Consequently, if on the date of the allotment the land lay within an urban area, the allocation was to be assessed according to the principal paragraph of the definition, and the proviso did not apply. The alleged discrimination arose from the rule establishing a cut‑off date, namely the date the rule became effective, to decide whether an allotment was lawful. Such a claim was inherently contradictory because every statute must possess a commencement point from which it operates, and a rule that modifies the law cannot be declared void merely for creating a change. While it is sometimes permissible to argue injustice when a rule is applied retrospectively, asserting that a prospectively applied rule is invalid because it distinguishes between past and future cannot be accepted. The Court further observed that the distinction drawn by the rule did not amount to unlawful classification, but merely reflected the legislative intent to apply the rule only to future allocations. The judgment therefore concluded that the contention of unconstitutionality based on the rule’s prospective operation could not succeed.

The case was a civil appeal numbered 543 of 1962, filed against the judgment and order dated 26 November 1959 of the Punjab High Court in Civil Writ No. 678 of 1957. Counsel for the appellant were named, and separate counsel were listed for respondents numbered one, two, three, four and five. The judgment was delivered on 12 March 1964 by Justice Ayangar, who authored the opinion of the Court. The appeal arose from a certificate of fitness granted under Article 133 by the Punjab High Court, challenging the High Court’s dismissal of the appellant’s petition filed under Article 226 of the Constitution. The Court explained that the dispute involved a narrow question, so it would present only those facts necessary to understand the parties’ submissions. The appellant’s father had owned extensive agricultural land in Pakistan and, together with his family, migrated to India at the time of partition. Although the father had previously received a sizeable land allocation in the village of Kharar, Ambala district, that allocation was not the subject of the present appeal. The father retained an unresolved claim for additional land, and on 29 December 1955 the Managing Officer allotted to the appellant, on quasi‑permanent tenure, the Khasra numbers 880, 881 and 882 located within the municipal limits of Kharar. The appellant’s father had died in 1952, so the 1955 allocation was made in the appellant’s favor as a substitution for his father’s pending claim. Following the allotment, the Managing Officer issued a sanad to the appellant on 31 December 1955. When the appellant attempted to take possession of the allotted land, the respondents raised objections, initiating the subsequent proceedings.

In this case the respondents asserted that they had occupied the disputed land for a long period prior to any later claim and that, because of that earlier possession, they could not lawfully be removed; they further contended that the land could not be the subject of a valid governmental allotment. Acting on this contention, the respondents approached the Assistant Settlement Commissioner seeking the cancellation of the allotment that had been made in favour of the appellant. The Assistant Settlement Commissioner allowed the application and held that the three Khasra numbers involved fell within an “urban area” as defined by rule 2(h) of the Displaced Persons Compensation and Rehabilitation Rules, 1955. Since the Rules classified the land as urban, the Commissioner concluded that the allotment to the appellant contravened the applicable law and therefore set aside the allotment. After the cancellation, the appellant filed a revision application before the Chief Settlement Commissioner, which was dismissed. Unsatisfied with the revision outcome, the appellant then approached the High Court by filing a petition under Articles 226 and 227 of the Constitution. That petition was also dismissed, and the present appeal challenges the correctness of that dismissal. Counsel for the appellant presented two principal arguments. The first argument maintained that, because the Managing Officer had issued a sanad on 31 December 1955 in the name of the President of India, the appellant had obtained an indefeasible title to the land, a title that could be disturbed only on grounds expressly provided in the sanad, even if the allotment order were later set aside on appeal or revision. The Court referred to its own earlier decision in Shri Mithoo Shahani and Ors. v. The Union of India and Ors., pronounced on 10 March 1964, and indicated that, for the reasons explained in that case, the contention must be rejected. The second argument, which formed the core of the appellant’s case before the High Court, was that rule 2(h) of the 1955 Rules was unconstitutional because it violated Article 14 of the Constitution, and consequently the original allotment to the appellant should be deemed lawful. The Court found no merit in this argument, stating that it could not discern any substantive basis for the claim. The Court further noted that Section 40 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 authorises the Central Government, by Gazette notification, to make rules necessary for implementing the Act, and there was no allegation that the 1955 Rules were made without such authority. The Rules were published on 21 May 1955 and came into force on that date. Rule 2(h), whose validity was challenged, is a definitional provision. The relevant portion of rule 2(h) reads, in essence, that “‘Urban area’ means any area within the limits of a corporation, a municipal committee, a notified area committee, a town area committee, ….”

The rule defines “urban area” to include any locality that falls within the limits of a corporation, a municipal committee, a notified area committee, a town area committee, a small town committee, a cantonment, or any other area that may be notified as such by the Central Government from time to time. The rule further provides that for the purpose of quasi‑permanent allotment of rural agricultural lands that had already been made in the States of Punjab and Patiala and East Punjab States Union, the limits of an urban area shall be taken as they existed on 15 August 1947. An amendment issued in 1957 replaced the words “of rural agricultural lands” in the proviso with the words “in rural area”, but the amendment does not alter the substance of the definition. The term “rural area” is separately defined in rule 2(f) as any area that is not an urban area. These definitions were part of the rules that were published on 21 May 1955 and that came into operation on that date.

The Court noted two matters that were not in dispute. First, the allotment to the appellant was made on 29 December 1955 and the corresponding sanad was issued two days later, meaning that the allotment occurred after the rules had become effective on 21 May 1955. Second, the plots identified as Khasra numbers 880, 881 and 882 were incorporated within the urban limits on 10 February 1951 when the municipal area of Kharar was extended to cover those parcels. Consequently, on the date of the appellant’s allotment, the land in question was situated inside an “urban area”, and under the operative definition it could not have been lawfully allotted. The Court expressed that it could not discern the precise discrimination that the rule was alleged to contain, which would render the rule unconstitutional as a violation of Article 14. According to the appellant’s submission, the alleged unreasonable discrimination arose from the operation of the proviso, which states that for quasi‑permanent allotments already made before 21 May 1955 in Punjab and PEPSU, the determination of an “urban area” must be based on the situation as of 15 August 1947. The appellant’s allotment, however, took place after the rules were in force and therefore was not one of the “already made” allotments. As a result, if the land was classified as an urban area on the date of the allotment, the main definition applied and the allotment could not be validly made, which was the basis for the Court’s earlier order. The appellant argued that the discrimination lay in the rule drawing a line at the date of its commencement, thereby affecting the validity of the allotment. The Court found it difficult to appreciate how a prospective operation of the rule could constitute discrimination. While it was conceivable that the disputed land might have been allotted before the rules were framed, the Court held that this possibility does not justify a conclusion that the rule, which was within the rule‑making power conferred by the Act, was invalid.

The Court noted that a rule which falls within the rule‑making authority conferred by the Act cannot be declared invalid merely because it changes the law. Such a contention, according to the Court, is plainly self‑contradictory and lacks any logical foundation, because it attempts to invalidate a law that is duly enacted. The Court further explained that every piece of legislation must have a defined commencement date, and that a rule intended to modify the law operates from that specified point onward. Consequently, a rule which seeks to amend the law cannot be dismissed solely on the ground that it effects a change in the legal position. While the Court recognized that it is sometimes permissible to challenge a rule on the basis of injustice when the rule is applied retrospectively, it rejected the notion that a prospectively operating rule is invalid merely because it distinguishes between past and future. The Court stated that it could not accept an argument that the mere prospectivity of a rule renders it void, as that would create an unreasonable division between earlier and later transactions. Having found no substantive merit in the appeal, the Court concluded that the appeal must fail and ordered that it be dismissed with costs. Accordingly, the appeal was dismissed and the parties were directed to bear the costs as prescribed by the applicable rules of court.