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CASE NO.: Appeal (civil)  6546 of 1999

PETITIONER: Govt. of A.P. & Anr.                                     

RESPONDENT: Syed Akbar                                               

DATE OF JUDGMENT: 19/11/2004

BENCH: SHIVARAJ V. PATIL & B.N. SRIKRISHNA

JUDGMENT: J U D G M E N T W I T H

CIVIL APPEAL NO. 4110 OF 2000

Shivaraj V. Patil J.

CIVIL APPEAL NO. 6546 OF 1999

       The State of Andhra Pradesh is in appeal questioning  the validity and correctness of the impugned order made by  the Division Bench of the High Court in Writ Appeal No. 411  of 1998.

       The few facts which are relevant and necessary for the  disposal of this appeal are the following:         An extent of 1573 sq. yds. in survey No. 54/2 of  Kakaguda village in Hyderabad district was acquired by the  State for improvement of Hyderabad-Karimnagar- Ramagundam Road which included the land of the  respondent to the extent of 8 guntas (968 sq. yds.).  After  completing the acquisition proceedings, the possession of  the said land was taken.  Aggrieved by the amount of  compensation determined @ Rs. 1400 per sq. yds., the  respondent sought reference under Section 18 of the Land  Acquisition Act,1894 (for short ’the Land Acquisition Act)  seeking enhancement of compensation amount and the  reference is pending disposal before the Reference Court.

       Out of the land so acquired, only 424 sq. yds., of land  was utilized and the rest of the land remained vacant.  The  Resident Engineer (Roads & Buildings) addressed a letter  dated 27.12.1996 to the Land Acquisition Officer (Special  Collector) informing him that it was difficult to protect the  unused land from future encroachment.  Having come to  know about this letter, the respondent made  representations to the District Collector to re-assign unused  land to him and that he was prepared to reimburse the  compensation that had been received by him along with  interest.  He also indicated that he was prepared to give up  his claim for enhancement of compensation to that extent  of land.  There was no response from the collector.  The  respondent filed a writ petition No. 14062/97 in the High  Court seeking a writ of mandamus to the authorities to re- assign the unused land to him.  He based his claim on the  Standing Order No. 90 (32) of the A.P. Board of Revenue.  

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A learned Single Judge of the High Court disposed of the  writ petition on 4.7.1997 directing the District Collector to  consider the request of the respondent for re-assigning of  the unused land in the light of the order of the Board of  Revenue aforementioned having regard to the letter of the  Resident Engineer dated 27.12.1996  and by collecting the  amount of compensation already paid with 12% interest.   Pursuant to the directions given in Writ Petition No. 14062  of 1997 the respondent made representation to the  authorities seeking re-assignment of unused land.  The  District Collector by his order dated 18.10.1997 rejected  the said representation, holding that the said land was  suitable for construction of Mandal Office.  In this order the  District Collector referred to the judgments of the Supreme  Court in State of Kerala and others vs. M. Bhaskaran  Pillai and another [(1997) 5 SCC 432], and Sri Gulam  Mustafa and others vs. State of Maharashtra and  others [AIR 1977 SC 448].  As against this order of the  District Collector the respondent filed another writ petition  No. 33171 of 1997 in the High Court.  The learned single  Judge, after considering the contentions of the parties, by  order dated 2.1.1998, allowed the writ petition directing the  authorities to hand over the unused portion of the land to  the respondent by collecting the amount of compensation  already paid with interest at the rate of 12%.   It may be  added here itself that para 32 of the Board’s Standing Order  No. 90 was amended by the Government Order dated   9.10.1998 to the effect that in case the land acquired  remains unused for any reason, it could be utilized for any  other public purpose as deemed fit.  Aggrieved by the order  of the learned Single Judge, the State filed a writ appeal  before the High Court.  By the impugned appeal, the  Division Bench of the High Court held that apart from the  Board’s standing order 90(32), Section 54-A of the Andhra  Pradesh (Telangana Area) Land Revenue Act (for short ‘the  Act’)  also supported the case of the respondent.  The  Division Bench also took the view that the proposal to  construct Mandal Revenue Office building in the unused  land was an after-thought and was made with a view to  circumvent the order passed by the learned Single Judge  and even otherwise, the unused land in question was so  small that it would not be sufficient to construct any  building.  Having held so, the Division Bench of the High  Court dismissed the writ appeal by the judgment which is  under challenge in this appeal.

       The facts are not in dispute.  The questions that arise  for consideration are whether direction could be given to  the appellants to re-assign unused land to the respondent  which was duly acquired by the authorities and the  acquisition proceedings had become final except that the  reference is pending before the Reference Court only with  regard to enhancement of compensation and whether the  Board’s Standing Order No. 90(32) and Section 54-A of the  Act can be applied for reassignment of the unused land in  favour of the respondent.

       Learned counsel for the appellants contended that  once the land is acquired in accordance with law which  vests in the Government free from all encumbrances, no  direction could be given to re-convey the unutilized land  which is part of the acquired land;  Section 54-A of the Act  is not at all applicable to the facts of the present case; the  Standing Order No. 90(32) of the Board of Revenue has no  statutory force and at any rate it cannot override the

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provisions of the Land Acquisition Act and that the Division  Bench of the High Court was not correct in observing that  the unused land was not sufficient for the purpose of  construction of the Mandal Revenue Officer; it was for the  concerned authorities to examine the sufficiency or  otherwise of the available land.

       In opposition, the learned counsel for the respondent  made submissions supporting the impugned order for the  very reasons stated in it.  In his argument, he reiterated  the submissions that were made before the High Court.   According to him, having regard to the facts and  circumstances of the case, this Court may not interfere with  the impugned order exercising jurisdiction under Article 136  of the Constitution.

       In order to appreciate the respective contentions  advanced on behalf of the parties, it would be useful to  notice relevant portion of the Standing Order No. 90(32) of  Board of Revenue and Section 54-A of the Act. The Board’s standing order

"32.    Disposal of land which is no longer required  for the public purpose for which it was acquired.

Notes \026 (1) No land shall be disposed of, under  this paragraph, to any person other than the  citizen of India, except by the Collector or the  Board and with the previous permission of State  Government, every grant made under this  paragraph shall be subject to the condition that,  if the land is alienated without the sanction of  Government in favour of any person other than a  citizen of India, the grant shall thereupon  become null and void.    

       .........................................................

When land acquired for a public purpose, is  subsequently relinquished, it should be disposed  of as follows:-

(i)     If the land relinquished is likely to be again  required for public purposes, it should be  merely leased out for such term as may be  considered, desirable in each case. (ii)    ................ (iii)   ................ (iv)    If the land is not declared unfit for  permanent occupation under clause (i) or  (ii) above and was agricultural or pastoral  land at the time of the acquisition, it should  be disposed of in accordance with the  following instructions which should not be  deviated from without the previous  sanction of State Government: -         Such lands should be notified for sale  in public auction by giving wide publicity in  respect of the sales in the villages by beat  or tom-tom and affixing notice of sales in  conspicuous places in the villages  concerned.  The date of sale should be  fixed allowing an interval of thirty days  between the date of publicity and the date  of sale.  The land should be sold by public

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auction subject to the annual assessment.   There shall be no upset price except in the  case of railway relinquished lands where a  minimum or upset price should be fixed in  consultation with Railway Administration  before auction.  If at the time of sale  anybody puts forth his claim in respect of  any field either as an adjacent owner, or as  an original owner or as heir of the original  owner, the sale of that field should be  stopped and his claim investigated and  disposed of in the manner specified in sub- clause (2) and (3).  If it is found that his  claim is not proved, the field should be sold  by public auction."

       The amendment to paragraph 32 of Board’s Standing  Order No. 90(32) brought about by G.O.Ms. No. 783 dated  9.10.1998 reads:

"For paragraph 32 of B.S.O. 90, the following  paragraph shall be substituted, namely:-

PARA 32  Utilisation of acquired lands for any  other Public Purpose:

"The land acquired for a public purpose under  the Land Acquisition Act, 1894 shall be utilized  for the same purpose for which it was acquired  as far as possible.  In case, the land is not  required for the purpose for which it is acquired  due to any reason, the land shall be utilized for  any other public purpose, as deemed it,  including afforestation."

Section 54-A of the Act reads: "Procedure in respect of land acquired for  purpose of public benefit and no more required \026  When agricultural or pasturage land acquired for  public benefit is no longer required, the patta  thereof shall be made in the name of the person  or his successor from whom such land was  acquired, provided he consents to refund the  compensation originally paid to him.  If such  person or his successor does not take the land, it  may be given on patta under Section 54."

       It is neither debated nor disputed as regards the valid  acquisition of the land in question under the provisions of  the Land Acquisition Act and the possession of the land had  been taken.  By virtue of Section 16 of the Land Acquisition  Act, the acquired land has vested absolutely in the  Government free from all encumbrances.  Under Section 48  of the Land Acquisition Act, Government could withdraw  from the acquisition of any land of which possession has not  been taken.  In the instant case, even under Section 48,  the Government could not withdraw from acquisition or to  re-convey the said land to the respondent as the possession  of the land had already been taken.  The position of law is  well settled.  In State of Kerala and Ors. Vs. M.  Bhaskaran Pillai & Anr. [(1997) 5 SCC 432], para 4 of  the said judgment reads:- "4.     In view of the admitted position that the  land in question was acquired under the Land

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Acquisition Act, 1894 by operation of Section 16  of the Land Acquisition Act, it stood vested in the  State free from all encumbrances. The question  emerges whether the Government can assign  the land to the erstwhile owners? It is settled law  that if the land is acquired for a public purpose,  after the public purpose was achieved, the rest  of the land could be used for any other public  purpose. In case there is not other public  purpose for which the land is needed, then  instead of disposal by way of sale to the  erstwhile owner, the land should be put to public  auction and the amount fetched in the public  auction can be better utilised for the public  purpose envisaged in the Directive Principles of  the Constitution. In the present case, what we  find is that the executive order is not in  consonance with the provision of the Act and is,  therefore, invalid. Under these circumstances,  the Division Bench is well justified in declaring  the executive order as invalid. Whatever  assignment is made, should be for a public  purpose. Otherwise, the land of the Government  should be sold only through the public auctions  so that the public also gets benefited by getting  a higher value."  

       In that case, an extent of 1.94 acres of land was  acquired in 1952 for construction of National Highway and  the construction was completed in 1955 in 80 cents of land  and the balance of land remained unused.  The remaining  land was sought to be sold to the land owner at the same  rate at which the compensation was awarded under Section  11.  This again was challenged in the writ petitions.  The  Government tried to sustain the action on the basis of the  executive order issued by the Government for permission  for alienation of the land.  On these facts, the position of  law was made clear in para 4 extracted above.  Thus, it is  clear that under Section 16 of the Land Acquisition Act, the  acquired land should vest in the State free from all  encumbrances and that any executive order inconsistent  with the provisions of Land Acquisition Act was invalid.   Further that if the land is acquired for a public purpose,  after the public purpose was achieved, the rest of the land  could be used for any other public purpose.  In our view,  this decision supports the case of the appellants fully.

       In the case Chandragauda Ramgonda Patil & Anr.          vs. State of Maharashtra & Ors. [(1996) 6 SCC 405],  claim of the petitioner for restitution of the possession of  the land acquired pursuant to the resolution of the State  Government was rejected.  In para 2, this Court observed  thus:-

"2........ We do not think that this Court would be  justified in making direction for restitution of the  land to the erstwhile owners when the land was  taken way back and vested in the Municipality  free from all encumbrances.  We are not  concerned with the validity of the notification in  either of the writ petitions.  It is axiomatic that  the land acquired for a public purpose would be  utilized for any other public purpose, though use  of it was intended for the original public purpose.   It is not intended that any land which remained

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unutilized, should be restituted to the erstwhile  owner to whom adequate compensation was  paid according to the market value as on the  date of the notification.  Under these  circumstances, the High Court was well justified  in refusing to grant relief in both the writ  petitions."                  Yet in another recent decision, this Court in Northern  Indian Glass Industries vs. Jaswant Singh & Ors.  [(2003) 1 SCC 335] referring to the case of Chandragauda  Ramgonda Patil (supra) and other cases held that "if the  land was not used for the purpose for which it was  acquired, it was open to the State Government to take  action but that did not confer any right on the respondents  to ask for restitution of the land".  Paras 10 and 11 of the  said judgment read thus:-

"10.    In Chandragauda Ramgonda Patil vs. State  of Maharashtra [(1996) 6 SCC 405] it is stated  that the acquired land remaining unutilized was  not intended to be restituted to the erstwhile  owner to whom adequate compensation was  paid according to the market value as on the  date of notification.

11.     Yet again in C.Padma Vs. Dy. Secy. To the  Govt. of T.N. [(1997) 2 SCC 627], it is held that  acquired land having vested in the State and the  compensation having been paid to the claimant,  he was not entitled to restitution of possession  on the ground that either original public purpose  had ceased to be in operation or the land could  not be used  for other purpose."         

       From the position of law made clear in the  aforementioned decisions, it follows that (1) under Section  16 of the Land Acquisition Act, the land acquired vests in  the Government absolutely free from all encumbrances; (2)  the land acquired for a public purpose could be utilized for  any other public purpose; and (3) the acquired land which  is vested in the Government free from all encumbrances  cannot be re-assigned or re-conveyed to the original owner  merely on the basis of an executive order.

       At the hearing, we specifically asked learned counsel  for the respondent whether the Board’s Standing Order  90(32) was issued under any particular statute, the learned  counsel was not able to point out to any provision of law  under which it was issued.  He was not in a position to show  that the said order bears any statutory force.  Even  otherwise, as per para 32 of the said order, the land  acquired, no longer required for the public purpose for  which it was acquired, could not be disposed of in favour of  any person other than the citizen of India and that too  without the sanction of the Government .  If the land  acquired for the public purpose is specifically relinquished,  such land could be disposed of as stated in the said  paragraph.  If the land relinquished is likely to be again  required for public purposes, it should be merely leased out  for such term as may be considered desirable in each case.   If the acquired land was an agricultural land at the time of  acquisition, it should be disposed of inviting for sale in  public auction by giving wide publicity in respect of sale.  If  at the time of sale, anybody puts forth his claim in respect

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of any field either as an adjacent owner or as an original  owner, the sale of that field should be stopped and his claim  investigated and disposed of in the manner specified in sub- clauses (i) and (iv) of Note (2) of the Board’s order 90(32).   If it is found that his claim is not proved, the field should be  sold by public auction.  In the case on hand, there is  nothing on record to show that the part of the acquired land  which remained unused was relinquished by the  Government.  A letter of Resident Engineer stated that the  unused land was no more required cannot amount to  relinquishment of the said land by the competent authority.   In order to make a claim under para 32 of the said Board’s  Standing Order in the first place, it was necessary that the  competent authority had subsequently relinquished the  unused land.  After such relinquishment of the land, the  land had to be notified for sale in public auction.  If at the  time of sale of such land, the original owner made a claim,  sale could be stopped and his claim could be investigated  and thereafter the land was to be disposed of in the manner  specified under the said paragraph.  Added to this, by virtue  of the amendment to para 32 brought about by G.O.Ms. No.  783 dated 9.10.1998, the land for the public purpose  shall  be utilized for the same purpose for which it was acquired  as far as possible and in case the land is not used for the  purpose for which it was acquired due to any reason, the  land shall be utilized for any other public purpose as  deemed fit.  It appears this amendment was not brought to  the notice of the High Court.

       Chapter V of the Act deals with occupation of khalsa  land and right of occupant.  Under Section 54, procedure is  prescribed for acquiring unoccupied land.  This Section  enables a person to submit a petition to Tehsildar if he is  desirous of taking unoccupied land.  On such application,  the Tehsildar may in accordance with the rules made by the  Government give permission in writing for occupation.   Section 54-A indicates the procedure in respect of land  acquired for the purpose of public benefit and which is no  more required.  It is clear from plain and clear language of  the said Section that when an agricultural land acquired for  public benefit is no longer required, the patta thereof shall  be made in the name of the person or his successor from  whom such land was acquired provided he consents to  refund the compensation originally paid to him.  This  Section does not say that the agricultural land acquired for  public benefit is no longer required for the purpose for  which it is acquired.  This Section can be attracted only in a  case where agricultural land acquired for public benefit is no  longer required not necessarily for the specific purpose for  which it was acquired.  Added to this, that the land is no  more required is a decision required to be made by the  competent authority.  As in the present case, mere letter of  Resident Engineer that the unused land is no more required  is not enough.  When the land is acquired under the Land  Acquisition Act which is vested in the State Government  free from all encumbrances, the question of reconveying  the land as claimed by the respondent could not be  accepted in view of the clear position of law stated in the  decisions of this Court aforementioned.  Whether the  unused remaining land out of the acquired land was  sufficient or not for the purpose of construction of Mandal  Revenue Office could not be decided by the High Court.  It  was for the competent authorities to decide about the  same.  The High Court, in  our view, was not right in saying  that the proposal to construct the Mandal Revenue Office in

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the unused land  acquired was an after-thought.  No  material was placed on record to attribute any mala fides  on the part of the authorities or to support the case that the  proposal to build a Mandal Revenue Office was an after- thought.

       Thus viewed from any angle, we find it difficult to  sustain the impugned order.  Consequently, it is set aside  and the writ petition filed by the respondent is dismissed.   The appeal is allowed accordingly.  No costs.

CIVIL APPEAL NO. 4110 OF 2000

       The building bearing No. 21/1/683 situated at  Kokarwadi, Rikabgunj, Hyderabad belonging to respondent  no. 1 was acquired by erstwhile Hyderabad Government for  Kokarwadi Scheme of the then City Improvement Board.   The award was passed under the Land Acquisition Act on  25.7.1953 and compensation was paid to the respondent  no. 1.  In 1956, the Andhra Pradesh Housing Board was  established and all the properties of the then City  Improvement Board stood transferred and vested in the  Andhra Pradesh Housing Board, the appellant herein.  Since  the Kokarwadi Scheme was abandoned, the building in  question was leased out to the respondent no. 2.  The  respondent no. 1 made representation to the appellant  seeking reconveyance of the building on payment of  compensation amount with interest relying on Standing  Order No. 90(32) of the Board of Revenue.  On 28.9.1979,  appellant passed resolution for disposing of the property  and similar other properties to the tenants.  On 6.2.1989,  the appellant rejected the representation of the respondent  no. 1.  Under the circumstances, the respondent no. 1- erstwhile owner of the building filed a original suit in  City  Civil Court, Hyderabad, seeking a mandatory injunction for  re-conveyance of the building and possession of the same.   The appellant contested the suit.  The trial court decreed  the suit in favour of the respondent no. 1 relying on the  Standing Order No. 90(32) of the Board of Revenue.  The  respondent no. 2 here who was in occupation of the  property as a tenant was defendant no. 2 in the suit.  The  appellant filed first appeal before the 4th Additional Chief  Judge, City Civil Court, Hyderabad.  The second respondent  did not prefer any appeal against the decree made by the  trial court.  The Addl. Chief Judge dismissed the first appeal  affirming the decree made by the trial court.  The appellant  filed the second appeal before the High Court which was  also dismissed.  Hence, this appeal.

       Learned counsel for the parties in this appeal also  made similar submissions that were made in Civil Appeal  6546 of 1999 bringing to our notice facts of this case.

In the view we have taken in Civil Appeal No.  6546/1999 dealing with the Board’s Standing Order No.  90(32) and Section 54-A of the Act and keeping in view the  settled position of law, this appeal is also entitled to  succeed.  Under the circumstances it is unnecessary to deal  with other contentions.  Accordingly, this appeal is allowed.   The impugned judgment is set aside and the suit filed by  respondent no. 1 (plaintiff)  is dismissed with no order as to  costs.