“  REPORTABLE”   

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 3840-3841 OF 2001

M.P. Housing Board …. Appellant

Versus

Shiv Shankar Mandil & Ors. …. Respondents

With

CIVIL APPEAL NOS. 3842-3843 OF 2001

State of M.P. & Ors. …. Appellants

Versus

Shiv Shankar Mandil & Anr. …. Respondents

J U D G M E N T

V.S. SIRPURKAR, J.

This Judgment will dispose of Civil Appeal Nos. 3840-3841 of 2001

and 3842-3843 of  2001.  All  the appeals relate to a common judgment

passed by Division Bench of the High Court of Madhya Pradesh, Bench at

Gwalior,  by  which  the  Division  Bench  disposed  of  two  Letters  Patent

Appeals, being Letters Patent Appeal Nos. 315 of 1996 and 296 of 1996.

The first  two appeals  are  filed by the  Madhya Pradesh Housing Board

(hereinafter referred to as “the Board”), whereas, the other two appeals are

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filed by State of  Madhya Pradesh and one of  its  officers.   Controversy

relates to a plot of land in Morena, Madhya Pradesh, measuring 11 biswa

in Survey Plot No. 462.  The private respondent, namely, Shiv Shankar

Mandil submitted an application on 29.12.1990 to the General Manager,

District Industries Centre, Morena, contending therein that he had his small

scale industry manufacturing steel furniture and he needed some land to

establish  the  unit.   The  General  Manager,  District  Industries  Centre,

Morena submitted an application by Letter No. 138 dt. 8.1.1991 requesting

to transfer Survey No. 462 measuring 11 biswa which was recorded as

“Charnoi  Extra  Nazul”  in  favour  of  the  respondents  for  establishing  an

industry.   This  proposal  was  sent  to  Tehsildar,  Morena,  who  invited

objections from various authorities.  No objections were, however, received

by him.   He,  thereafter,  obtained  the  consent  of  the  Municipal  Officer,

Morena.  He also consulted Town and Country Planning, Health and Police

Departments and proposed the transfer to the Collector.  The Collector on

consideration of all the facts, ordered on 27.7.1991, a transfer of the said

land  to  the  General  Manager,  District  Industries  Centre,  Morena under

Clause 4-3, para 36 of the Revenue book circulars.  It is on the basis of

this, that the District Industries Centre, Morena by his order dt. 29.07.1991

agreed to allot the said land on three conditions:-

(i) Obtaining the appropriate approval of the lay out plan

(ii) Obtaining  building  permission  from  the  concerned

Department  

(iii) Submission of a map of the lay out plan.

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In  pursuance  thereof,  a  Lease  Deed  was  created  for  99  years  on

30.7.1991.

2. However, Assistant Engineer, Madhya Pradesh Housing Board, Sub-

Division  Morena  approached  the  Collector  by  Letter  dt.  23.8.1991  and

pointed  out  that  the  allotment  of  Survey  No.  462  made  by  Industries

Department to the respondents was objectionable.  It was pointed out that

said Survey Number was in the middle of a residential plan of the Board.  It

was then pointed out that a letter was already written by Commissioner of

the Board for transferring Survey Nos. 458, 462, 482 and 485, which were

Government lands in favour of  the Board.   The proposal  for  transfer  of

Survey  No.  462  was,  however,  already  over.   Further,  the  Board  had

started acquisition proceedings by paying the diversion charges.  It  was

further pointed out that the Board had also sought for paper possession in

respect  of  the  aforementioned  four  Survey  Numbers  and  intended  to

execute  a  residential  plan,  wherein,  1000  residential  plots  had  been

proposed  for  solving  the  residential  problem in  Morena  Town.   It  was

expressed  further  that  if  M/s  S.S.  Industries  of  the  respondents  was

permitted to establish an industry, then the plan of the Board would be

upset  and  the  expenditure  invested  in  the  development  plan  would  be

wasted.  It was, therefore, prayed that the allotment of the land of Survey

No.  462  should  be  cancelled  and  the  work  commenced  by  M/s.  S.S.

Industries should be stopped.  The Collector, by his order dt. 27.8.1991

directed the respondents to maintain status quo and further ordered the

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respondents  not  to  construct  on  the  allotted  land.   The  respondents,

therefore, filed the first Writ Petition, being Writ Petition No. 1513 of 1991.

3. During the pendency of this Writ Petition, the Board of Revenue of

Madhya Pradesh passed an order at  the instance of  Collector,  Morena,

permitting the Collector to review his own order dt. 27.7.1991.  This order

by the Board of Revenue was passed on 11.5.1994.  It was challenged by

the respondents herein by filing another Writ Petition, being Writ Petition

No.  1289 of  1994.   The  Collector  had  decided  to  review the  order  dt.

27.7.1991 in view of the observations by the Board regarding the transfer

of Survey No. 462.

4. Both these Writ Petitions came to be decided by the Learned Single

Judge  of  the  High  Court  of  Madhya  Pradesh,  Bench  at  Gwalior,  who

allowed both the Writ Petitions.  The Learned Single Judge, firstly, held that

the order passed by the Collector, restraining respondents to construct in

the leased plot was wholly incorrect.  The Learned Single Judge also held

that the Collector having already granted permission on 27.7.1991 could

not have decided to review that order so as to put the clock back and the

Board of Revenue had erred in granting such permission under Section 51

of the Madhya Pradesh Land Revenue Code, 1959 (hereinafter called “the

Code”  for  short),  which  permission  was  the  condition  precedent  for

reviewing the order passed by the Collector.  Two Letters Patent Appeals

came to be filed against this common order, which have been dismissed by

the  Division  Bench  of  the  High  Court  of  Madhya  Pradesh,  Bench  at

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Gwalior, necessitating the present two appeals which have been separately

filed by the State of Madhya Pradesh, as also by the Board.

5. Shri  R.P.  Gupta,  Learned Senior  Counsel  and Shri  B.S.  Banthia,

Learned Counsel, appearing on behalf of the appellant, painstakingly, took

us through various documents, as well as the provisions of the Code.  The

basic contention of the Learned Counsel was that this land was a reserved

land and there was an entry in the Revenue records, describing the land as

“Charnoi Extra Nazul”, from which it was clear that it was a reserved land

for the grazing and, therefore, there was a clear bar under Section 237 of

the Code from transferring this land for the industrial purposes.  The initial

order of the Collector dt. 27.7.1991, transferring this land to the Industrial

Department itself was without jurisdiction.  Taking argument further, both

the counsel urged that as a result, the Industrial Department could not have

created a lease in favour of the respondents and, therefore, the Lease was

null and void and ineffective.  Both the Learned Counsel urged that the

decision of the Board of Revenue, allowing the Collector to review his order

dt. 27.7.1991 was a correct decision and should not have been interfered

with by the Learned Single Judge, as well  as the Division Bench.  The

arguments went further and suggested that, in fact, the first, as well as the

second  Writ  Petition  were  premature  as  the  Collector  had  not  so  far

reviewed his order.   The Counsel also urged that if an industry is allowed

to  be  set  up  in  the  midst  of  the  residential  area,  it  would  not  only  be

improper,  but  would  affect  the  ecology  and  the  citizens  living  in  the

neighbouring area would suffer on that count.    

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6. As against this, the Learned Counsel for the respondents Shri S.S.

Khanduja supported both the orders and pointed out that, firstly, the State

Government as well as the Board could not have assailed the Lease Deed,

which was a valid Lease Deed for valuable consideration, that too in a Writ

Petition filed by the respondents.  He pointed out that there is no Civil Suit

filed for cancellation of Lease Deed which was the only way to wipe out this

Deed.   According  to  the  Learned  Counsel,  therefore,  the  State

Government,  as  well  as  the Board  were trying  to  get  this  Lease Deed

cancelled in an indirect manner by attacking the transfer of this land in

favour of the Industrial Department.  The Learned Counsel further urged

that there was no question of application under Section 237 of the Code

and the Board of Revenue could not have used its discretion to allow the

Collector to review the matter after a period of three years and the Learned

Single Judge was absolutely right in holding that the delay on the part of

the State Government and/or the Collector to move for review, was fatal.

The Learned Counsel  also  suggested that  there  is  no  question  of  any

ecological imbalance, as already there are industries in the neighbourhood

of the said plot.  It is on the basis of these rival contentions that we have to

consider  the correctness of  the impugned judgments.   We may go into

some undisputed facts.   

7. It was not disputed before the High Court that though there was a

request  by Housing Commissioner,  Bhopal  dt.  26.12.1978 in  respect  of

Survey Plot Nos. 458, 462, 482 and 485, which were Government lands,

no action was taken for acquiring the land in dispute, which is a part of the

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Survey No. 462.  Very strangely, it was pleaded before the High Court that

it was by “inadvertence” that the land was not acquired.

8. The  execution  of  the  Sale  Deed  and  the  validity  thereof  is  not

disputed.  The contention is that the land could not have been transferred,

there being Nistar rights of grazing on the land.  The Learned Counsel for

the appellant when confronted with the specific question as to whether the

Government  could  have  leased  out  the  land  independently  without

transferring  it  to  the  Industrial  Department,  did  not  dispute  such  power

Therefore, it is clear that the land even otherwise (without being transferred

to  the  Industrial  Department)  could  have  been  leased  out  as  it  was,

undoubtedly,  a  Nazul  land  owned  by  the  Government.   The  original

petitioner  (respondent  herein)  had  obtained  possession,  paid  premium,

spent money for obtaining the Registered Sale Deed and also made the

initial expenditure for preparing the land for raising structures and yet the

Government authorities had remained dormant for a good long period for

more than 3 years for deciding to exercise their power of review.

9. At this juncture, it  will  be useful to consider findings given by the

Learned Single Judge, who allowed both the petitions.  The Learned Single

Judge appears to have come to the conclusion that this was a valid Lease

Deed for valuable consideration and the same could not be set at naught or

nullified by exercise of power of review by the succeeding Collector under

Section 51 of the Code as the only grounds on which the Lease could be

set aside were provided specifically by Section 182 of the Code, which

provisions could not be controlled by Section 51 of the Code.  The Learned

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Single Judge also found that there was no breach of any of the provisions

of Section 182 of the Code, so as to nullify the Lease.  The Learned Single

Judge also held that the authorities could not move for a permission to

review the order dt. 27.7.1991 after a lapse of three years and the exercise

was not in the reasonable time.

10. The Division Bench, firstly, considered the question raised before it

regarding the validity of the Letters Patent Appeals and held them tenable.

The  question  of  tenability  has  not  been  argued  before  us.   We  will,

therefore, not go into that question.  As regards the merits, the Division

Bench in para 55 of its Judgment, noted that there was a clear admission in

the counter affidavit filed by the respondent No. 3 therein that the land in

dispute was surrounded by the land acquired by the Board and was the

Nazul land.  The Division Bench, therefore, expressed that when this Nazul

land was transferred to the Industrial Department and thereafter, leased out

to the respondents herein, it had ceased to be a land as envisaged under

the Zamindari Abolition Act and was a non agricultural land.  The Division

Bench then went on to consider the provisions of Section 234 of the Code,

which  stipulate  preparation  of  Nistar  Patrak  embodying  scheme  of

management  of  all  unoccupied  lands  in  the  village  and  all  matters

incidental thereto and more particularly, the matters specified in Section

235 of the Code.  The Division Bench went on to note the Revenue book

circular issued by the State Government, issuing the directions in various

matters  in  regard  to  the  management  of  the  land  vested  in  the  State

Government.  It made a reference to “Rajasva Pustak Paripatra, Khand 4,

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Kramank 1” and noted that the terms ‘Nazul’ and ‘Milkiyat Sarkar’ referred

in  that  book  suggested  that  the  lands  in  possession  of  the  State

Government or the Central Government were to be classified in the two

categories, i.e., ‘Nazul’ and Milkiyat Sarkar.’  It also noted the admission

that this land was a Government land and had obviously become a part of

the urban land, since it was not to be used for agricultural purposes.  

11. It was, therefore, obvious that the land was, undoubtedly, a property

of the Government under Section 57(1) of the Code and the Collector had

granted the permission for diversion of this land for setting up the industry.

We have carefully examined the provisions of Section 181(1) and 182 of

the Code, which pertain to the lease and we are of the considered opinion

that merely by changing the nomenclature of the category of the land which

was admittedly sought to be done by the Collector, later on, the said lease

hold rights of the respondents could not be set at naught.  For that, it would

be necessary to cancel the Lease Deed or to nullify the same through the

modality provided by Section 181(1) and 182 of the Code and not by the

indirect method of changing the category of the land.  Section 181(1) and

182 of the Code reads as under:-

“181. Government Lessees: (1)   Every  person  who  holds land from the State Government or to whom a right to occupy land is granted by the State Government or by Collector  and  who  is  not  entitled  to  hold  as  a Bhumiswami  shall  be  called  a  Government  lessee  in respect of such land.

182. Rights and liabilities of a Government lessee:    (1) A  Government  lessee  shall,  subject  to  any  express provisions in this Code, hold his land in accordance with the terms and conditions of  the grant,  which shall  be

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deemed  to  be  a  grant  within  the  meaning  of  the Government Grants Act, 1895 (XV of 1895).

(2) A  Government  lessee  may be  ejected  from his land by order of a Revenue Officer on one or more of the following grounds, namely:-

(i) that he has failed to pay the rent for a periof of three months from the date on which it became due; or

(ii) that  he has used such land for  purposes other than for which it was granted; or

(iii) that the term of his lease has expired; or (iv) that he has contravened any of the terms

and conditions of the grant.

Provided that no order for ejectment of a Government lessee under this sub-Section shall be passed without giving him an opportunity of being heard in his defence.”

Section 234 of the Code contemplates preparation of Nistar Patrak, which

is  prepared for  embodying a scheme of management of  all  unoccupied

land in a village.  Section 235 of the Code provides for the matters to be

provided for in Nistar Patrak and sub-Section (a) whereof is as under:-

“235.   Matters  to  be provided for  in  Nistar  Patrak:-  The matters which shall be provided for in the Nistar Patrak shall be as follows, namely:-

(a)  terms and conditions on which grazing of the cattle in the village will be permitted.

(b)   Not relevant (c) Not relevant (d) any other matter required to be recorded in

the Nistar Patrak by or under this Code.”

Section 236 mandates as under:-

“236.  Provision in  Nistar  Patrak  for  certain  matters:  In preparing the Nistar Patrak as provided in Section 235, the Collector shall, as far as possible, make provision for-

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(a) free  grazing  of  the  cattle  used  for agriculture.

(b) removal free of charge by the residents of the  village  for  their  bona  fide  domestic consumption of-

(i)  forest produce; (ii)  minor minerals;

(c) Not relevant.”

Section 237 mandates that Collector may set apart unoccupied land for the

purposes  given  in  that  Section,  which  include  as  many  as  about  10

purposes.   Sub-Section  1(b)  mentions  for  pasture,  grass  bir  or  fodder

reserve.  Sub-Section (2) spells out a specific bar in the following words”-

“(2) Lands set apart specifically for any purpose mentioned in  sub-Section  (1),  shall  not  otherwise  be  diverted without the sanction of the Collector.

(3) Subject to the rules made under this Code, the Collector may divert such unoccupied land, which is set apart for the purposes mentioned in clause (b) of sub-Section (1) subject  to  secure  minimum  two  percent  of  the agriculture land of that village for the said purposes in to abadi or for agricultural purposes.”

12. Relying heavily on Section 237(2), the contention raised before us,

as well as before the High Court was that this being a Nistar land, could not

have been diverted by the Collector.  We do not see any such bar.  In the

first place, it  is not specifically proved that this was a land carrying any

Nistar rights.  On the other hand, this was specifically admitted to be a

“Nazul land”.  That apart, we do not see any bar in diverting the unoccupied

land.   It  is  shown that  this  land  was specifically  set  apart  for  pasture.

Barring one revenue entry, the State Government has not produced any

evidence either  before the Learned Single Judge or before the Division

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Bench of the High Court or even before us to suggest that this particular

piece of land was set apart for pasture or for fodder reserve.  Under the

circumstances, we do not see any reason to hold that Sections 235-237

were applicable herein.

13. Even if  it  is  held  that  the said land was a grazing land and was

treated  as  such  before  its  being  diverted  by  Collector  for  commercial

purpose, merely by cancelling the said diversion, the subsequent validly

created Lease Deed cannot be said at naught.  Both the Learned Single

Judge,  as  well  as  the  Division  Bench  are  correct  in  holding  that  the

subsequent Lease Deed would hold good.

14. The subsequent stance for reviewing the diversion order is slightly

intriguing.   The Collector wanted to review his own order under Section 51

of the Code and for that purpose, needed the sanction of  the Board of

Revenue under sub-Section 1(1) of Section 51 of the Code.  Section 51

runs as under:-

“51. Review of orders:-   (1)  The Board and every Revenue Officer  may,  either  on  its/his  own  motion  or  on  the application  of  any  party  interested,  review  any  order passed by itself/himself or by any of its/his predecessors in  office and pass such order  in  reference thereto  as it/he thinks fit:

provided that-

(i) if  the  Commissioner,  Settlement  Commissioner, Collector of Settlement Officer thinks it necessary to  review  any  order  which  he  has  not  himself passed, he shall  first  obtain the sanction of  the Board, and if an Officer subordinate to a Collector or  Settlement  Officer  proposes  to  review  any order,  whether  passed  by  himself  or  by  any predecessor, he shall first obtain the sanction in

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writing of the authority to whom he is immediately subordinates.”

It will be clear from the language that it is a review power and such review

power would have to be exercised within a reasonable time.  We agree

with the Learned Single Judge that in this case, it  took more than three

years  for  the  State  Government  to  move to  the  Board of  Revenue for

reviewing  the  orders.   The  Learned  Counsel  appearing  on  behalf  of

appellants tried to suggest that at that time, there was status quo order

pending, passed by the High Court on the first Writ  petition filed by the

respondents herein.  We have examined the record carefully and we find

nothing in the record suggesting that the State Government could not have

exercised the power under Section 51 of the Code.  In AIR 1969 SC 1297

State of Gujarat Vs. Raghav, this Court held that the review power should

be used in reasonable time.  We accept the finding of the Learned Single

Judge as confirmed by the Division Bench of the High Court that the power

of review has to be exercised within a reasonable time and that in this

case, three years of time, without any explanation, could not be viewed as

a  reasonable  time  in  view of  the  fact  that  the  petitioner  had  obtained

possession, paid premium, spent money for obtaining the Registered Sale

Deed and have also made the initial expenditure for preparing the land for

raising  structures.   The  said  Government  could  not  have  allowed  the

petitioner to do all these things and then chosen to review its own powers.

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15. That apart, even if the earlier order dt. 27.7.1991 was reviewed, it

could not be set at naught the Lease Deed which was validly created.  It

could not have cancelled the lease only for the reasons stated in Section

182(2) of the Code, which reasons were obviously absent in the case.  In

that view, we are of the clear opinion that the impugned judgments of the

Division Bench of the High Court confirming the judgment of the Learned

Single Judge of that Court are correct judgments and need no interference.

We,  therefore,  dismiss these appeals,  but  without any orders as to the

costs.

…….………………………J.           ( Lokeshwar Singh Panta )

…….………………..…….J. ( V.S. Sirpurkar )

New Delhi; October 24, 2008  

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Digital  Performa

Case  No.   : Civil Appeal No. 3840-3841 of 2001 With Civil Appeal No. 3842-3843 of 2001  

Date of Decision : 24.10.2008

Date of C.A.V. : 14.10.2008

Cause Title :  M.P. Housing Board Versus

   Shiv Shankar Mandil & Ors.

 With

State of M.P. & Ors. Versus

Shiv Shankar Mandil & Ors.

Coram :   Hon’ble Mr. Justice Lokeshwar Singh Panta     Hon’ble Mr. Justice V.S. Sirpurkar      

Judgment delivered by  :    Hon’ble Mr. Justice V.S. Sirpurkar

Nature of Judgment :  Reportable

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